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| | | | Palin's Pay Cut as Mayor Followed by a Raise
By Juliet Eilperin
On the campaign trail, GOP vice presidential nominee Sarah Palin has declared at least four times that she cut her own pay as Alaska's governor.
"And, you know, as mayor and as governor, I tried to lead by example," she told the crowd at a Sept. 9 rally in Lebanon, Ohio. "So as mayor, I took a voluntary pay cut, which didn't really thrill my husband."
But just-released records from the Wasilla clerk's office show a slightly more complicated picture. Palin's pay did drop from $64,200 in October 1996 to $61,200 in January 1997, but in June 1998 it jumped to $68,000. Palin's pay did dip once more in July 1999 to $66,000, according to the records, but it jumped back to $68,000 three months later, and it stayed at that level until Palin left office in October of 2002.
Palin spokeswoman Maria Comella did not have an immediate explanation for the ultimate pay boost Palin experienced as mayor. |
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| | | | Did Palin's Pay As Wasilla Mayor Really Get Cut?
By Greg Sargent - September 18, 2008, 2:49PM
One thing Sarah Palin cites as proof of her reform credentials is a pay cut she says she took when she became Mayor of Wasilla in 1996.
"As mayor I took a voluntary pay cut, which didn't thrill my husband; and then as governor I cut the personal chef position from the budget, and that didn't thrill my hungry kids," Palin said recently, repeating a frequent refrain.
But did she really get an overall pay cut as mayor? The record suggests a more complex story.
While Palin did appear to get a pay cut ordinance passed upon entering, several years later her salary had actually gone up to the point where it ended up thousands of dollars higher than it was just before she took office, local press reports at the time show.
Two reports in the local Alaska press in 1999, three years after she became Mayor, say explicitly that her salary at that time was $68,000, higher than the $64,000 it was just before she took over as mayor. The pay hikes were apparently due to mandated salary increases that the City Council refused to overrule, though that's not certain.
The McCain campaign was unable to explain why her salary had gone up and how that squared with her claim of taking a cut.
Asked for proof of her claim that she took a pay cut, the McCain campaign provided us with minutes from a Wasilla City Council meeting from November 13, 1996, which appear to show that Palin introduced and passed some sort of measure to reduce her salary by 10 percent.
But that's not the end of the story.
Three years later, on March 12, 1999, an article ran in The Frontiersman which explicitly reported that Palin's salary was higher at that time than it was when she took over. The article describes a City Council vote where the Council, in the words of the paper, "decided to leave the mayor's salary at $68,000." It was $64,000 when Palin took over, according to the paper.
An article in the same paper a week earlier shows Palin herself discussing the fact that she'd accepted the increase, albeit against her will:
The mayor's wage was increased from $64,000 to $68,000 in 1996, just before Sarah Palin was elected.
"I voted against it when I was a council member and I felt like a hypocrite when I came in and had to accept it," Palin said.
"Two and a half months after I was elected, the new resolution kicked in, but I took a pay cut down to $61,200. Then I had to accept the $68,000 since the last fiscal year started."
So what appears to have happened is this: As a Council member she voted against hiking the mayor's salary from $64,000 to $68,000, but it passed anyway. When she came in as mayor, she passed the ordinance which brought her salary down to $61,200. But that may not actually have taken effect, and Council-mandated raises brought her actual salary up to $68,000.
The McCain campaign was unable to explain whether her salary actually was cut. And the McCain campaign declined to comment on the fact that her salary had actually ended up higher than it was when she first took office, beyond referring us back to the original minutes of the initial meeting where the first ordinance was passed. |
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| | | | Reimbursements Raise Tax Issues for Palin
By MARY JACOBY and JESSE DRUCKER
Several tax experts said they believe Republican vice-presidential nominee Sarah Palin is required to pay federal taxes on $25,000 in reimbursements from the state of Alaska for her children's travel expenses.
The Alaska governor released her 2006 and 2007 tax returns on Friday, sparking a lively debate on tax blogs and among tax professionals over whether reimbursements and per-diem meal payments from the state should be subject to federal taxes. Since taking office in December 2006, Gov. Palin, whose state salary is $125,000 a year, received reimbursements totaling $43,500 for travel and lodging for her family in connection with state business. Of that total, $25,000 was for her children's travel and the rest was for her husband, Todd, the Washington Post reported.
While several tax experts have raised serious questions about whether the payments to Gov. Palin are taxable income, they said the case was clearer cut for treating the reimbursements for the children's expenses as taxable income. "The kids are a slam dunk problem," said Robert Spierer, a partner with the accounting firm Perelson Weiner LLP in New York City. "The husband you could make an argument that he had to be there because it was required for spouses to be there."
But not the children, he said. "I don't think I would ever claim that on my clients' returns. I can't think of a real strong argument for it."
Gov. Palin also accepted $17,000 in per-diem meal payments for nights spent at her home in Wasilla, 40 miles from the governor's office she used in Anchorage, Alaska's largest city. Gov. Palin often used that office rather than traveling to the state capital of Juneau, more than 800 miles away. Several tax experts have argued this should be counted as taxable income.
The McCain-Palin campaign released an opinion letter from Washington, D.C., criminal tax lawyer Roger M. Olsen, concluding that Gov. Palin complied with Alaska law in not reporting the reimbursements and meal payments as income.
A spokesman for the McCain campaign said Gov. Palin relied on the W2 wages form from the state of Alaska in filing her tax return, which was prepared by H&R Block. The W2 did not include the travel reimbursements as income.
"The state believes it is interpreting IRS policy correctly. It has no indication to believe that it is misinterpreting that policy," said Brian Jones, a McCain campaign spokesman.
Gov. Palin "has every right to assume the state of Alaska knows how to handle her W2," said Alan D. Westheimer, a certified public accountant in Houston. "These people [the Palins] are not tax lawyers. They went to H&R Block" to prepare their taxes.
Mr. Westheimer said this shows a good-faith attempt on the part of the Palins to comply with the law. Of the travel reimbursements for her children, "it may not be the letter of the law," he said, "but it's arguably within the spirit of the law because it's related to her job."
Tax experts said a good case could be made that Mr. Palin, as the spouse of the governor, was required to attend official functions and was thus eligible for the travel and lodging reimbursements, even though he is not an Alaska state employee. Many of them said it is less clear why Gov. Palin's children would be required at official state functions.
Bryan Camp, a tax professor at Texas Tech University School of Law and a former Internal Revenue Service lawyer in Washington, said the IRS would ask several questions to determine whether the travel reimbursements were reported properly.
Those questions include whether Mr. Palin and the children were employees of the state of Alaska, whether they traveling for bona fide business purposes, and whether they would have been able to deduct those travel expenses on their own tax returns for business purposes.
Because the answer to at least one and possibly more of those questions is no, "The Palins should have reported the $43,000 in family travel allowances received in 2007 as income," Mr. Camp wrote in an analysis. |
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