Per diems at risk with new legislation

Thanks to changing attitudes among younger lawmakers and a spate of Harrisburg scandals, per diems – the tax-free, receipt-free expense payments used by some legislators – could be on their way out after decades of use, some in the General Assembly said.

Tied to a federal rate and used by some businesses and government agencies, per diems allow workers easy reimbursement for hotel stays and meals without keeping piles of receipts.

But in Harrisburg, they’ve long been the target of reformers who claim they serve as barely concealed bonuses for lawmakers.

“The public has been complaining about per diems for a long time,” said state Sen. John H. Eichelberger Jr., R-Blair, who is co-sponsoring a Senate bill that would end the practice. “The question is whether the leadership will pave the way.”

“There will be pushback from certain members that are per diem-takers,” Eichelberger said.

To its supporters, the system offers lawmakers a clear, simple rate – currently $157 per day for room and board in Harrisburg – that covers their frequent back-and-forth trips to the capital. But recent legal slip-ups, including a scuttled cash-gifts investigation involving several Philadelphia-area representatives, have cast a spotlight on otherwise unrelated reform efforts.

“If I’d taken [per diems] in 2013, I could have pocketed as much as $17,000,” state Rep. John McGinnis, R-Altoona, said. “I think I turned in $4,800 for reimbursement. There’s the difference: $12,000 in tax-free income that could have gone into my pocket.”

Since his election in 2012, McGinnis has refused per diems, instead submitting receipts for his work expenses.

He’s one of several newly elected representatives who, unlike their predecessors, have turned down the lump sum payment option. Rick Geist, the veteran representative McGinnis defeated in the 2012 Republican primary, received $14,500 in combined expenses and per diems in his last several months in office, according to reports at the time.

Rep. Jesse Topper, R-Bedford, has refused the payments since he won a January special election for the state House 78th District. Dick Hess, his predecessor and mentor, occasionally ranked high on lists of per diem recipients.

“I look at it as: That’s not the way expenses are reimbursed in the private sector. You turn in a receipt,” Topper said.

Rep. Tommy Sankey, R-Osceola Mills, has refused them since his 2012 election, a staffer said.

At a March forum, the two Republican candidates seeking to replace outgoing Rep. Jerry Stern, R-Martinsburg, said they would refuse per diems. The third, independent Jason Lynn, said he wasn’t well-versed in the issue but vowed to keep expenses low.

“I would not accept per diems,” Republican candidate Judy Ward told a tea party audience.

“There’s no reason someone should be getting $20,000 or $25,000 per year,” her opponent, Aaron Ritchey, said. “No, I wouldn’t accept per diems.”

The candidates offered a change of attitude from Stern, who uses the system and argues that the reaction to the payments is partly overblown. Stern received $13,136 in per diems in 2013, according to a Right-to-Know request filed with the state House clerk.

Acknowledging that some in the General Assembly have abused per diems, Stern said knee-jerk reactions to political scandals can lead to bad policy. The 2005 legislative pay-raise controversy and ensuing “Bonusgate” scandal drew unprecedented media attention to lawmakers’ expenses, he said.

“The whole thing is media-driven. … Everyone gets labeled because of a few bad actors,” Stern said.

In February, media investigations in northeastern Pennsylvania revealed that several lawmakers had used per diems to pay for mortgages on second homes; at least one former legislator then sold his taxpayer-funded house for a profit.

Only legislators living more than 50 miles from Harrisburg can apply for the payments.

They can take them both during sessions and when doing legislative work on non-session days. While newly elected lawmakers across the state have turned away from the system, Stern noted that some are too green to recall the days, decades ago, when receipts were required for legislative expenses. A painful Internal Revenue Service audit ultimately drove the General Assembly to adopt per diems, he said.

“They said, ‘We don’t ever, ever, ever want to go through an IRS audit ever again,” he said. “I found it a little amusing that [new legislators] want to go back to the prehistoric ages.”

Stern is certainly not the only local lawmaker to use per diems: Rep. Mike Fleck, R-Huntingdon, got $9,697 last year; Rep. Gary Haluska, D-Patton, got $9,898; and Rep. H. Scott Conklin, D-Philipsburg, got $14,729, according to state documents.

In the state Senate, Sen. Jake Corman, R-Centre, collected $8,101 last year while Sen. John Wozniak, D-Cambria, got $13,263, according to documents requested from the clerk’s office.

With the winds changing in Harrisburg, however, a per diem ban has a serious shot at passage, Stern said. Eichelberger, a longtime opponent of the system, agreed.

“In general, the newer members do not take the perks like the older members do. New members are different,” he said.

Senate Bill 1291, proposed in March by a Pittsburgh-area Republican with co-sponsors from both parties, would require itemized receipts while setting the daily expense maximum at the existing federal per diem rate. It is awaiting action from the Senate State Government Committee.

“We started to look at this, actually, earlier in the year. Then the cash-gifts situation hit and that accelerated things,” Eichelberger said. “The reform effort that’s going on in the Senate is a real effort.”