Should outside income limits be stronger for lawmakers?

Limits on the amount of money state lawmakers can earn outside of their jobs as elected officials are failing, a government watchdog organization warned this week as the Legislature began its 2023 session.

Outside income for state lawmakers in what is considered a technically part-time legislature has long been a thorny issue, and some lawmakers have criticized the new restrictions as potentially unconstitutional.

New York lawmakers this year are getting a $32,000 pay raise with their pay reaching $142,000 under a measure passed last month and signed into law by Gov. Kathy Hochul. The new law places limits on the amount of money lawmakers can earn outside of their government jobs.

Legislators’ outside income is limited to 25% of their government salaries. There are exemptions for income from family businesses and no prohibition on income from sources that have a fiduciary relationship with the state government.

Restrictions on foreign earnings will come into effect in 2025.

In a statement, the group Reinvent Albany pointed to stronger provisions contained in a wage commission legislative recommendation issued in 2018. The new law leaves many loopholes, the group argued.

The commission, which faced multiple legal challenges, initially recommended a 15% cap on outside income, banned income from sources with financial interests ahead of the state and limited salaries for lawmakers.

“The bottom line is that the law that gives the Legislature a big pay raise includes very weak controls on conflict of interest and leaves massive loopholes for ‘family businesses’ and fiduciary business relationships that invite pay to play,” Reinvent Albany said.

Foreign revenue has long been scrutinized by good governance groups in New York as a generator of public corruption. In recent years, lawmakers have been asked to disclose more information about their earnings, their sources and their business clients.

But some lawmakers are embarrassed by the changes. Assemblyman Phil Steck, a Democrat who represents Albany, noted in an interview last month that none of his law clients have jobs before the state.

Members from both parties have also questioned the constitutionality of limiting foreign salaries. More broadly, lawmakers have argued that the Legislature was also envisioned as a citizen-driven body staffed by New Yorkers with real-world experience in the private sector.

“A lot of people who are talking devoutly about this foreign income ban have rich spouses or come from wealth,” Steck said.