Vt. senator pushes to constrain nonprofit pay to that of the governor

The review was prompted by concerns about a $650,000 retirement package for Health Care and Rehabilitation Services in Springfield.

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Vt. senator pushes to constrain nonprofit pay to that of the governor April McCullum, Free Press Staff Writer Published 5:14 p.m. ET Dec. 19, 2017 News You Should Know: Dec. 19, 2017 AKI SOGA/FREE PRESS 636295923200394527-BUR201755Pearson.JPGBuy Photo (Photo: APRIL MCCULLUM/FREE PRESS) State Sen. Christopher Pearson is proposing to limit salaries and other compensation for employees of state-funded nonprofit organizations. If the bill passed, nonprofit organizations that receive at least $1 million from taxpayers could have no employees earning more than the governor of Vermont, unless the nonprofit received a state waiver. The governor's salary is about $166,000. In practice, Pearson said, many of the organizations that fall into this category would request a waiver, creating a list for lawmakers to analyze. He hopes to pressure nonprofit board members to think differently about compensation packages and income inequality. "I sort of think that it’s an interesting policy discussion that I’m hoping to spark," said Pearson, P/D-Chittenden. Pearson could not say how many nonprofit organizations would be affected by the bill, but said the group would likely include the University of Vermont and Vermont state colleges. Pearson said his bill was inspired in part by a recent state report showing that the CEO of the University of Vermont Health Network earned nearly $2.2 million in total compensation. "A lot of state dollars end up going to our nonprofit partners," Pearson said. "Whether it’s mental health providers or hospital CEOs, there are several instances where essentially taxpayers are helping to fund organizations that pay their directors huge amounts of money. And I think it’s important to shine a light on that." Taxpayers can already find information on executive compensation at nonprofit organizations by reviewing annual tax filings. A 2016 survey by Common Good Vermont, an organization that connects local nonprofits, found that the average Vermont nonprofit executive director earned an annual wage of just over $83,000. The organization declined to comment on Pearson's bill. David L. Thompson, vice president of public policy at the National Council of Nonprofits in Washington, D.C., argued that any government effort to single out nonprofits for salary limits would be unfair. "It's wrongheaded to impose arbitrary rules or to treat nonprofits as something other than the independent provider of services that they are," Thompson said. His organization argues that any efforts to set compensation limits should apply equally to for-profit entities. Pearson says he values Vermont nonprofit organizations. "Our nonprofits are vital partners to the state. I'm not trying to attack nonprofits across the board," Pearson said. "I am saying that Vermonters deserve to see the pay scale that our tax dollars support and ask the question of whether or not that's working." The Vermont State Auditor's Office compiled this graph The Vermont State Auditor's Office compiled this graph of executive compensation at the state's 11 designated agencies in 2014, compared to top positions in state government. (Photo: COURTESY VERMONT STATE AUDITOR) Pearson's bill is the latest state effort to scrutinize organizations that receive state funding. In 2015, the Vermont State Auditor's Office examined executive compensation at 11 state-funded nonprofit organizations that provide mental health services, known as designated agencies. The review was prompted by concerns about a $650,000 retirement package for Health Care and Rehabilitation Services in Springfield. Pearson's bill, S.178, became public Friday on the General Assembly's website and is ready to be formally introduced in January. All bills ready for introduction have been posted on the Legislature's website here. Contact April McCullum at 802-660-1863 or amccullum@freepressmedia.com. Follow her on Twitter at @April_McCullum. Do you have a breaking news tip? Call us at 802-660-6500 or send us a post on Facebook or Twitter using #BFPTips.