Compensating City Councils
82 Pages Posted: 16 May 2017 Last revised: 2 Apr 2018
Date Written: March 26, 2018
How much of “other people’s money” should city councils be paid? This Article analyzes the issue of city council compensation by exploring the institutional design of compensation procedures and unpacking the normative concerns surrounding the pay of elected leaders of our cities. Should city councils decide their own pay? Should voters? Should the state legislature?
The Article contends that existing compensation procedures – such as city council control and voter referenda – distort compensation outcomes. Where procedures enable financial self-dealing, standards manipulation, or the under-accounting of non-salary compensation, overcompensation is the likely result. Conversely, where procedures enable reelection rent-seeking, election pathologies, or reverse ratcheting, undercompensation tends to result. Neither outcome is desirable. Overcompensation increases burdens on taxpayers; risks elected officials motivated more by pecuniary incentives than civic duty; and inadequately accounts for non-monetary benefits of elected office. Conversely, undercompensation can lead to elected office being open only to those wealthy enough to afford it; risks a less effective, accountable, and transparent government; and can result in conflicts of interest and corruption. To address these concerns, the Article advances a prescriptive framework to improve the institutional design of city council compensation procedures, and explores the unique second-order institutional design questions of state versus local control over city council compensation.
While compensation amounts are not necessarily determinative of quality of governance, compensation procedures affect who governs our cities. And who governs our cities matters because our cities matter. Cities large and small are responsible for an increasing share of public goods and services. In the face of deadlock at the federal and state level, cities have engaged in innovative policymaking on issues as varied as climate change, civil rights, campaign finance, and consumer protection. By better understanding the impact of compensation process on compensation outcomes, we can better understand the future of our cities.
Keywords: local government, city council, compensation, elections, municipal government, governance, institutional design, legislation, localism, public policy
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