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 our cities’ elected leaders. Should city councils decide their own pay? Should voters? Should state legislatures?
This Article contends that existing compensation procedures—such as city council control and referenda—distort compensation outcomes. Where procedures enable financial self- dealing or manipulation of standards, or where they insufficiently account for nonsalary compensation, overcompensation is the likely result. Conversely, where procedures enable rent-seeking behavior, exacerbate the politicized nature of politicians’ pay, or fail to account for pay stagnation, undercompensation tends to result. Neither outcome is desirable. Overcompensation increases burdens on taxpayers, increases the risk that elected officials will be motivated more by pecuniary incentives than civic duty, and inadequately accounts for nonmonetary 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, this Article recommends specific mechanisms to improve the institutional design of city council compensation procedures and explores the question of state versus local control over city council compensation.
While compensation amounts are not necessarily determinative of the 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 levels, 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 processes on compensation outcomes, we can better understand the future of our cities.
* Assistant Professor, University of Houston Law Center.