By Beth Musgrave – email@example.com
FRANKFORT — A little-noticed provision in the state House’s proposed budget would nearly cut in half the $250,000 salary of the state’s chief economic development officer.
The House on Wednesday passed a two-year, $17.5 billion budget that included a host of cost-saving provisions, including cutting the amount spent on service contracts by more than $100 million and saving $5 million by axing 120 political appointees over the next two years.
But deep in the budget is another provision that would cap the salary of Larry Hayes, the secretary of the Economic Development Cabinet. Hayes, who makes $250,000 a year according to the state’s transparency Web site, is the highest paid cabinet secretary.
The House budget says the Economic Development Secretary’s salary should not surpass the governor’s salary of $127,885.
Both Hayes and Beshear took 10 percent pay cuts this year.
Kerri Richardson, a spokeswoman for Beshear, said the administration has concerns that capping Hayes’ salary undermines the authority of the Kentucky Economic Development Partnership Board, which hires the secretary and oversees Hayes’ actions.
That arrangement is similar to other positions in state government, including the Commissioner of Education and the President of the Council on Postsecondary Education. The Commissioner of Education, Terry Holiday, makes $225,000. Robert King, the president of the CPE, makes $400,000.
“This provision is of concern to the extent that it diminishes the authority of the Economic Development Partnership Board and would inhibit recruiting in the future,” Richardson said.
Hayes also makes less than the previous economic development secretary, Richardson said.
Hayes declined to comment for this story.
With so many people out of work — nearly 82,000 last year — House leaders said agency heads shouldn’t be making salaries in the high six figures.
“In some of these quasi-governmental agencies, some of the salaries are getting out of hand,” said House budget chairman Rick Rand, D-Bedford.
Rand said he’s not sure the state needs to pay $250,000 to get a top-tier economic development chief. “If they don’t have to go any further than Louisville, Ky, then surely to God we can find somebody at the same salary as the governor,” Rand said.
Hayes had worked for Louisville Mayor Jerry Abramson before joining state government as secretary of Beshear’s cabinet.
Rand said House leaders have also sent strong messages to the boards of the state’s universities that salaries of university presidents need realigned.
Ironically, legislative leaders took heat from rank-and-file lawmakers and the public when it gave Legislative Research Commission Director Bobby Sherman a raise from $132,840 to $195,000 in 2008.
House Speaker Greg Stumbo, D-Prestonsburg, said he was not in leadership at the time that Sherman’s salary increase was approved.
When asked if the House would also cap Sherman’s salary, Stumbo said that “no agency head should make more than the governor.”
But Hayes is only one of 43 people in the executive branch of government, including four other cabinet secretaries, who make more money than Beshear.
Many of those people are doctors in the Department of Corrections or in public health. Others are commissioners or higher-level department secretaries.
Stumbo said he has no problem with doctors or others with specialized skills being paid salaries that are commensurate with their experience.
He and Rand both said they expect the Republican-led Senate to consider adding more salary caps in the budget.