2005-2025 PA Legislators Unlawfully Increase Their Pay and Pensions—the Whole Story

• July 7, 2005: The Pennsylvania House and Senate passed Act 44 at 2 a.m., July 7, 2005, increasing the salaries of officials in all three branches of government without public hearings, public debate or public knowledge. Payments were received between July 7 and November 16, 2005, ranging from $1,288 to $14,553.32 (before taxes).

The salaries for lawmakers increased from $69,648 to $81,050. The pay raise also bumped up pensions. There were 50 lawmakers who voted for the raise who were either defeated or decided to retire in 2006.

Prominent leaders who supported the raise, such as Representative Veon, Senate Majority Leader Brightbill, and Senate President Pro Tempore Jubelirer were defeated.

Lawmakers now make $110,115, which is an increase of $40,467. The per diem rate has increased from $141 to $181 per day. The “slush funds” have grown from $215 million to $300 million. The cost to run the legislature is now $438,858 plus $299,873.

• July to August, 2005: Supreme Court Chief Justice Ralph Cappy said his efforts in support of the pay-raise measure - which was formally introduced by representatives Raymond Bunt Jr., a Montgomery County Republican, and Michael R. Veon, the Democratic Whip - included meeting with the governor and party leaders in both houses.

Mr. Cappy said he strongly suggested to the politicians with whom he met that they wed Pennsylvania's elected officials' salary scheme to that of the federal system.

Gene Stilp filed suit and claimed that Cappy violated three principles of the judicial code: neglecting the court's independence, acting improperly on behalf of the Supreme Court, and overstepping his boundaries as a judge by secretly meeting with lawmakers about the pay raise.

The pay raises for the legislative and executive branches were rescinded four months after they were passed following public outcry. However, the judicial branch was able to get their pay increased following a court battle.

• September 27, 2005: Rock the Capital organized a rally on the steps of the Capital protesting the pay raise. There were 1,500 demonstrators, speakers from good-government groups, and Bob Durgin unfurled a petition containing 129,000 signatures calling for the repeal of the pay raise. You can read the press release including sponsoring orgamizations HERE.

• November 7, 2005: Voters initially aimed their wrath at the legislative groups such as Sweep, Democracy Rising, No Pay Raise Project and Rock the Capital, and a 25-foot floating pig focused on legislative reform.

The watchdogs unleashed a “No on Nigro and Newman” campaign. The groups who were bi-partisan took aim at Democratic and Republican Supreme Court justices. Put the “NO!” in November.

The amount of money involved in the justices' campaigns was unprecedented. Mr. Nigro raised just under $400,000. Mrs. Newman raised $300,000 in a week, and purchased spots featuring a voiceover by Tom Ridge, the former Pennsylvania governor and former U.S. Homeland Security secretary.

Justice Sandra Schultz Newman squeaked by with only 54 percent approval, while voters ousted her fellow justice, Russell Nigro, with 51 percent voting to dump him. It is the first time that a judge has been tossed off the bench in the 36 years since the state established its retention system, which seeks voter approval of elected judges every 10 years. Law.com

• November 16, 2005: As a result of public pressure, the General Assembly passed Act 72 of 2005, repealing the pay raise on November 16, 2005. Act 72, however, the action did not require those who had received increased salaries to return the funds. The legislature repealed the pay raise after four months by a 50–0 vote in the Senate and 197–1 vote in the House.

• April 13, 2006: Press Releases: RockTheCapital.org (“RTC”) asks the IRS and Department of Revenue to Issue Tax Opinions on Unvouchered Expenses.

RTC announced that it has asked the Internal Revenue Service and the Pennsylvania Department of Revenue to investigate the state and federal tax implications of “unvouchered expenses.” While public pressure forced the repeal of the illegal raises last year, many lawmakers are refusing to return the money to the taxpayers and others have opted to repay it over time.

At issue is how the Internal Revenue Service (“IRS”) and the Pennsylvania Department of Revenue (“PDR”) will define, account, assess, monitor and verify the additional income. Eric Epstein said, “The most important question is establishing the tax definition of “unvouchered expenses.” We believe that the pay hike has been calculated and disbursed as a gross wage, and should be treated as such by the IRS and the Department of Revenue

RTC also noted that some legislators are paying back the "unvouchered expenses" over several years which constitutes a de facto interest-free loan from the public coffer.

• April 17, 2006: Rock the Capital publishes the Legislators Pay Raise Table HERE

• May 12, 2006: Rock the Capital publishes 37-page Review of the Pennsylvania Legislative Pay Raise, including statistics and status of state legislators' actions. You can read it HERE.

• July 6, 2006: On the 1-year anniversary of the illegal pay raise, Rock the Capital publishes, "One Year Later... 60 House Members Profit From Pay Raise & Nine Senators Refuse to Return Looted Dough." You can read it HERE.

• September 14, 2006: the Pennsylvania Supreme Court reinstated the pay raises for the state's 1,200 judges, but ruled that the “unvouchered expenses” provision violated the state's constitution.

• November 7, 2006: There were 50 lawmakers who voted for the raise who were either defeated or decided to retire in 2006. Prominent figures who supported the raise, such as Representative Veon, Senate Majority Leader Brightbill, and Senate President Pro Tempore Jubelirer, were defeated.

• July 7, 2009: 5-year anniversary of the pay-raise scandal. Eric Epstein publishes Pay Raise Update, "60 Current and Former Legislators Still Refuse to Pay the Money Back." You can read it HERE.

• July 6, 2010: Eric Epstein releases "60 Current and Former Legislators Continue to Profit for Stealing Taxpayer Dollars and Refuse to Pay the Money Back", a 40-page document with specific detail on each PA legislator involved in the pay raise scandal. You can read it HERE.

• July 7, 2011: Eric Epstein publishes a 58-page update titled, "60 Current and Former Legislators Continue to Profit from Stealing Taxpayer Dollars Pension Pay-Outs Soar". You can read it HERE.

• August 14, 2011: Rock the Capital periodically tracks pension payments to state

lawmakers who received increases as part of the 2005 pay raise and did not return the

funds when that law was later repealed.

“Former Pennsylvania House Speaker John M. Perzel has been collecting on his state pension as he awaits trial on public-corruption charges, with records showing that he has cashed out hundreds of thousands of dollars from that account.”

“According to documents obtained by government activist Eric Epstein under the Right-to-Know Law, Perzel has taken a lump-sum pension payment of nearly $204,000. He also receives a gross monthly payment of $7,138, valuing his pension at $85,653 annually.” (“Philadelphia Inquirer” and the “Pittsburgh Post-Gazette,” April 14, 2011.)

• September 11, 2012: WNEP Investigative Reporter, Dave Bohman publishes, “Convicted Pols Collect Thousands Before State Stops Pension Payments.” HERE

More than a dozen lawmakers who took the 2005 legislative pay raise that was later declared unconstitutional by the courts are now reaping the reward of the pay bump they accepted through their pensions, according to a report issued by Rock the Capital. "That's a gift that keeps on giving," said Eric Epstein, founder of the government reform group, at a Capitol news conference.

He pointed out that several lawmakers who were among the key architects of the pay raise were behind bars and had to forfeit their pensions. They are former Reps. Bill DeWeese, John Perzel and Mike Veon. Former Sens. Vince Fumo and Robert Mellow also saw their pensions disappear after being convicted of misuse of public resources.

Other than that, Epstein had little good to say about what has transpired since the 2005 early morning vote to boost state officials' pay by 16 percent to 54 percent, despite the reforms that the House and Senate have put in place.

For example, despite the rule that requires legislative sessions to end by 11 p.m. that was put in place after the pay raise vote that occurred in the early morning hours, Epstein pointed out the lawmakers wrapped up their work on the 2012-13 state budget on July 1 in the early morning hours. (“Penn Live,” Jan Murphy, July 9, 2012.)

Pennsylvania's State Employees Retirement Service usually punishes crooked politicians by taking away their monthly pensions once these lawmakers are convicted of, or plead guilty to, felony corruption charges. But an Action 16 Investigation shows some of these lawmakers bring home hundreds of thousands of dollars before SERS stops these payments.

Collectively, records show these seven legislators who were convicted or pled guilty collected $628,000 in one-time, lump-sum payments, and are entitled to it, because it is the money they put into their pensions. But when it comes to monthly payments, even though the state stopped paying most of them when they were found, or pleaded guilty to corruption charges, the seven collectively had already taken in $907,000.

Former State Representative Mike Veon, former State House Speaker John Perzel, and former State Senator Vince Fumo are all in prison for corruption related crimes. These three collected about $390,000 combined, before they started doing time.

"Some of these folks have been ripping the taxpayers off, the taxpayers are paying their defense, they go to prison and still profit," says political activist Eric Epstein of rockthecapital.org. He believes these crooked politicians delayed their cases as long as possible, so they could collect monthly pensions and receive thousands before the pension board could legally stop payments.

"There’s a disincentive for political officials who are accused of wrongdoing to want a speedy trial," says Epstein. "They`re going to want to drag this out as long as they can, and right now, we don’t have the power to have them pay us back." (WNEP, Dave Bohman, September 11, 2012.)

• June 8, 2013: Rock the Capital releases a 23-page document on annual pensions tied to the pay-raise debacle. It covers 2005-2012 information on legislators in the PA House and Senate. You can read it HERE.

• 2015: Over ten years ago, Pennsylvania lawmakers approved a controversial pay raise for themselves that led to massive election defeats for those that voted for it. Now, few legislators remain that kept unvouchered expenses.

Eric Epstein, co-founder of Rock the Capital, held a press conference Tuesday, July 7, 2015 to speak about the now-infamous pay raise and where the legislators who accepted them are. Of those who kept unvouchered expenses, only 11 remain in the Pennsylvania House of Representatives and five are still in the Senate.

Epstein, who refers to those that accepted the raises in 2005 as "pay jackers," said the raises approved at 2 a.m. on July 7, 2005 were salary increases from 16 to 50 percent for members of the legislative, executive and judicial branches; and they were the only thing under Mellow’s tree. ABC27 confirmed he’ll be paid for the 66 months his pension was suspended. That’s right, back pay. It’ll be a lump sum of at least $1.3 million. “That’s obscene,” Epstein said. “What it says is that crime not only pays in Pennsylvania but it pays with compound interest.”

Initially in 2005, 131 House members and 27 Senators signed up for unvouchered expenses. Payments, Epstein said, were received between July and November and ranged from $1,288 to $14,553, before taxes. Following public outcry, the pay raises for the legislative and executive branches were rescinded four months after they were passed. However, the judicial branch was able to get their pay increased following a court battle.

• 2020, the15th Anniversary of Illegal Pay Raise: The Greed Machine Increases Legislators Pay from $69,648 to $90,300. On July 7, 2005, at 2:00 a.m., the Pennsylvania House and Senate passed Act 44, enacting a dramatic pay raise for officials in all three branches of government without public hearings, public debate, or public knowledge. The action, for which there is no record of debate in the journals of either the House or Senate, set off a political firestorm that led voters to remove a sitting Supreme Court justice from the bench for the first time in PA history in 2005; and that led to dozens of lawmakers either resigning or being beaten in the 2006 elections.

Although the raise was subsequently repealed as a result of public pressure, legislators received four months of payments in the form of “unvouchered expenses” to allow the raise to take effect immediately instead of after the next election, as mandated by the state Constitution. The payments between July 7 and November 16, 2005 ranged from $1,288 to $14,553.32 (before taxes). Lawmakers also kept an automatic cost of living adjustment (COLA) that has inflated their salaries and padded their pensions ever since.

Marking the fifteen-year anniversary of the pay raise, Eric Epstein, coordinator of Rock the Capital, said, “The Governor and the legislature should restore faith in government by repealing the automatic Cost of Living Adjustment (Act 51 of 1995).”

Epstein noted, “The most obscene aspect of the pay raise is that after its repeal, legislators’ ‘minimum wage’ has risen from $69,648 to $90,300. The legislature continues to reward Pennsylvania’s ruling class with an automatic annual bonus.”

2025, the 20th Anniversary of Illegal Pay Raise: Rock the Capital, under Epstein's leadership, continues to be a voice for government accountability, highlighting the lack of significant reforms since the pay raise scandal. Pennsylvania Capital-Star Article, WITF article