Cox’s Use of Per Diem Questioned

The Republican leader in the Assembly, who blames California’s budget crisis on waste and overspending, accepts an average of $26,000 a year in travel, housing and meal allowances even though he lives 20 miles from the Capitol.

Assemblyman Dave Cox pays taxes on the “per diem” money and donates what is left to charities. The lawmaker’s aides say he believes he puts the money to better use than government would.

But others say his acceptance of the money is unseemly given the state’s vast budget shortfall, which Cox and his fellow Republican lawmakers believe should be bridged primarily by cutting government programs.

“If Cox is saying we have to cut services and we can’t raise taxes,” said Bob Stern, president of the Center for Governmental Studies, “then he should do everything he can to make sure every dollar is spent wisely and appropriately.”

As a leader of the minority party in the 80-member Assembly, Cox earns $113,850 a year, more than the $99,000 paid to those who do not hold leadership posts.

On top of their salaries, state law allows legislators to be reimbursed for their travel and living expenses. The rate -- now $125 a day -- is set by a three-member panel including the state controller, the director of the Department of General Services and an appointee of the governor. It is intended to cover the costs of a second home and travel between a distant legislative district and Sacramento.

Federal tax statutes dictate that lawmakers who live more than 50 miles from the Capitol do not have to pay federal and state taxes on the per diem payments, while those who live closer -- such as Cox -- must pay taxes on the money if they accept it, said Assembly Chief Executive Jon Waldie.

Democrats Skip Money

Cox is the only state lawmaker who lives within 50 miles of the Capitol who accepts the per diem payments. The three other members of the Legislature who represent the Sacramento area -- Democrats Darrell Steinberg and Lois Wolk in the Assembly and Deborah Ortiz in the Senate -- all refuse the money.

“I thought it was really for living expenses,” said Wolk, who lives in Davis, roughly 15 miles from the Capitol. “I remember looking at the [per diem] language and thinking that didn’t really apply to me.

“Each member has to decide for themselves,” she said.

Cox refused to speak to a reporter about the matter. According to Waldie, Cox accepted $25,527 in pre-tax per diem payments in 1998-99, the first year he was elected. He accepted $24,442 the following year, $26,741 in 2000-01 and $27,225 last year.

Kevin Bassett, chief of staff to Cox, said that in the last couple of years Cox has donated the living-expense payments to the Sacramento Regional Foundation, a 20-year-old nonprofit community group that awards money to libraries, the local symphony, art exhibits, children’s mentors and a wide range of other programs.

Donations to the foundation are tax-deductible, subject to federal Internal Revenue Service rules, said Janice Pettey, the organization’s chief executive.

No Donation Figure

She confirmed that Cox is a donor, but would not say how much he has given. Bassett also refused to provide that figure.

In previous years, Cox has used the money to award college scholarships to local public and private high school students in his 5th Assembly District, Bassett said.

He chose the winners after soliciting nominations from school administrators.

“It’s no different than salary,” Bassett said. “The dollars that Mr. Cox donates are no different than the dollars that anyone else donates. He’s already paid taxes on those dollars.”

“I’m not sure why it’s relevant,” he added.

Stern said the symbolism is important, even if the amount of money is tiny compared to the state’s $38.2-billion gap between revenues and expenditures over the next 13 months.

“They don’t look at their own use of money in the Legislature as they look at other agencies,” he said, “and they need to apply the same standard.”

The per diem payments encourage lawmakers to show up for work in Sacramento, but they are also abused, Stern said. The Assembly and Senate, for example, don’t typically meet Friday.

But they often convene briefly -- sometimes just for a head count -- on the Friday before a three-day holiday weekend. Under the California Constitution, per diem payments must halt when the Legislature is out of session for more than three days.

So by meeting today, out-of-town lawmakers ensure that they will be paid $375 each for the weekend and Memorial Day when they are gone from Sacramento.

“The taxpayers see that they really don’t take this crisis seriously when they do things like that,” Stern said. “If we’re in a crisis, let’s act like we’re in a crisis.”