OFFICIAL OPINION No. 30

OFFICIAL OPINION No. 30 Commonwealth Compensation Com 111issiu11 Reports - Cabinet Officials - Federal Wage and Price Freeze Legislation L The Reports issued by the Penns.1dvania Compensation Commission on June 22, 197,2 and November 30. 1972 require that the salaries of selected cabinet officials be increased, 2, The Secretary of Education is and has been entitled to the increases authorized by the June 1972 Commission Report; the Secretary of Education having been appointed after the effective date of that Report 3, The Secretary of Banking, the Attorney General. the Commissioner of State OPINIONS OF THE ATTORNEY GENERAL 107 Police, the Secretary of Revenue, and -the Commissioner of Insurance are en- titled to the increases specified in the November 1972 Report of the Commission. 4. There is no constitutional impediment to the payment of these salaries notwithstanding Federal law under wage-price freeze legislation and regulations barred full payment of the salary increases up to April 30, 1"974. Honorable Frank Beal Secretary of Administration Harrisburg, Pennsylvania Dear Secretary Beal: Harrisburg, Pa. June 5, 1974 You have asked our opinion as to the effect of the removal of Federal wage-price restrictions on salaries of cabinet level of- ficials of the Commonwealth of Pennsylvania. Specifically, the question presented is: must the Commonwealth give effect to the initial and November 30, 1972 reports of the Commonwealth Com- pensation Commission enacted into law now that Federal wage and salary restrictions have been removed? It is our opinion and you are hereby advised that you are re- quired to give effect to the June and November Reports of the Pennsylvania Compensation Commission and accordingly the salaries of six cabinet level officials assuming office after the effec- tive dates of the reports must be raised to the statutory amount. Because of the dates of their appointments, the Secretary of Education must be _paid the salary prescribed by the initial June, 1972 Report of the Commonwealth Compensation Commission and the remaining five cabinet officials must be paid the salaries prescribed by the November 1972 Report of the Commission. The Commonwealth Compensation Commission was established by Act No. 8 of June 16, 1971, 46 P.S. §§5-6, and had the respon- sibility and duty of making an exhaustive study of the salaries, emoluments, retirement benefits and expense allowances of the Governor, the Lieutenant Governor, the cabinet officers, the State Treasurer and the Auditor General, the Justices and Judges of the Courts of the Commonwealth, and members of the General Assembly. The Act further provided that ~he Commission was to issue an initial report as soon as practicable and subsequent reports on or before the commencement of each term of the General Assembly. Section 2(b), 46 P.S. §6(b). The Act also stated: "The initial report shall take effect immediately, unless, within sixty days following the date of submission thereof the General Assembly shall, by concurrent resolution re- ject the report, in whole or part, or enacts legislation as 108 OPINIONS OF THE ATTORNEY GENERAL hereinafter provided in this section. Reports submitted subsequent to the initial report shall take effect and have the force and effect of law at the beginning of the first pay period of said term of the General Assembly or the date of assumption of office of persons affected thereby after such date, unless, within sixty days following the date of sub- mission thereof, the General Assembly shall, by con- current resolution, reject the said report, in whole or in part, or unless within said period the. General Assembly shall enact legislation which establishes a rate of pay or allowance differing from that recommended by said report in whole or in part. That portion of the report which is not inconsistent with the resolution or legislation so adopted shall have the force and effect of law as herein provided." In response to this legislation the Commission issued its initial report on June 22, 1972 and a subsequent report on November 30, 1972. In the course of preparation of its reports the Commission held hearings, heard testimony from twenty-six witnesses and in- terviewed numerous other persons. See Report of the Com- monwealth Compensation Commission, June, 1972, pp. viii, 28 & 29. (Hereinafter 'ReJ>ort, June 1972"). With respect to cabinet level officials within the Executive Branch, the Commission found that salaries for cabinet level officials had not been increased since 1967, that salaries of other persons in other fields had increased significantly in response to mcreased costs of living, and that the responsibilities of cabinet level officials had substantially in- creased as manifested by a doubling of the state budget and a 35 per cent increase in the number of state employees from 1967 to June 1972. Report, June 1972, at p. 13. The November 1972 report reiterated the Commission's earlier findings. The June 1972 Report recommended salary increases among others, for cab_inet officials. However, on August 15, l972 by Senate Reso~ut10n ~00 concurred in by the House, the General Assembly reJected, m part, the report of the Commission to the ex- ten~ that it ,P~ovided f~r increases in salaries in excess of $2,500 for cabmet officials and Judges. 2 Pa. Bulletin 1725. The November 1972 report issued November 30 1972 recom- mended salary increases for cabinet officials as foll~ws: Attorney General Secretary of Education Secretary of Public Welfare Secretary of Transportation Secretary of Environmental Resources Secretary of Health Secretary of Labor & Industry Secretary of Revenue $40,000 $40,000 $40,000 $40,000 $37,500 $37,500 $37,500 $37,500 OPINIONS OF THE ATTORNEY GENERAL Commissioner, Pennsylvania State Police Adjutant General Secretary of Agriculture Secretary of Banking Secretary of Commerce Secretary of the Commonwealth Secretary of Community Affairs Insurance Commissioner Secretary of Property and Supplies 109 $37,500 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 The November Report, not having been rejected or modified within sixty days by the General Assembly became effective per Section 2(b) of Act No. 8, supra. 1 Although it is not clear, it appears that the effective date of the initial report was August 15, 1972, the date of passage of Senate Resolution 100. As noted, Section 2(b) provides that the initial report takes effect immediately unless rejected or modified in whole or in part. Section 2(b) does not clearly indicate the effective date of a modified report or a report rejected in part, but in view of the fact that the Legislature took affirmative action with regard to the report on August 15, 1972, it is only logical and reasonable to assume the report is effective as of the later date. The effective date of the November Report is December 1, 1972, that date, under the provisions of Section 2(b) dealing with subse- quent reports, being the date on which the terms of service for members of General Assembly commence or, in effect, the first day of the first pay period for the General Assembly. See Article II, §2 of the Pennsylvania .Constitution. Subsequent to the corresponding effective dates of the June and November Reports, six cabinet officials were appointed as follows: (1) Secretary Pittenger, appointed and confirmed as Secretary of Education, November 30, 1972 (Appointed subsequent to the effective date of the initial report but not subsequent to the effective date of the November Report); (2) Secretary Dellmuth, appointed as an interim appointee as Secretary of Banking, December 30, 1972; (3) Attorney General Packel, appointed as an interim appointee, January 2, 1973; (4) Commissioner Barger, appointed as an interim appointee as Commissioner of State Police, January 2, 1973; 1 By Act No. 57 of July 27, 1973, the General Asse!fl~ly repealed those provisions of Act No. 8 establishing the Compensat10n Comm1ss10n. Smee Act No. 57 was pass- ed subsequent to the effective dates of the ~une and November Reports, those Reports remain unaffected by the repealer m Act No. 57. 110 OPINIONS OF THE ATTORNEY GENERAL (5) Secretary Yakowicz, appointed and confirmed as Secretary of Revenue, February 4, 197 4; (6) Commissioner Sheppard, appointed and confirmed as In- surance Commissioner, April 30, 1974. All of the above officials presently .hold their respective offices. However, due to the wage-price controls im1;>0sed under the Federal Economic Stabilization Act and Executive Orders issued pursuant thereto, all but the Secretary of Education have been barred from receiving the statutorily prescribed salaries as set forth in the June and November, 1972, Reports of the Commission.2 See 37 C.F.R. §24960 et seq., CCH-Wage and Price Reporter §201.94 et seq., QTC 3791 et seq.3 As of April 30, 1974, the Federal wage-price control program has terminated and. with the exception of petroleum products, there are presently no controls on wages, salaries, or prices. With the lifting of Federal wage-price controls, the first ques- tion is does Act No. 8 of June 16, 1971 authorize and requirefay- ment of the increased salaries. A reading of the language o the act, quoted above, clearly indicates that as cabinet officials become eligible for their salary increases they are to be paid. The language states that Reports submitted after the initial report shall take effect at the beginning of the term of the General Assembly for which the Report was submitted or the date of assumftion of office of persons affected thereby after the effective date o a Report. The initial report is to take effect immediately. Moreover, Section 3 of Act No. 8 states that the Act shall be applicable to each officer when permitted by the Constitution of the Commonwealth. With respect to the Secretary of Education, the initial Report of the Commission, effective June 22, 1972, was applicable to him and required that his salary be increased. With respect to the Secretary of Banking, the Attorney General, the Commissioner of State Police, the Secretary of Revenue, and the Insurance Com- missioner, the November, 1972 Report is applicable to them, they having taken office after commencement of the term of the General Assembly commencing immediately after the effective 2 The salaries are, for the Secretary of Education -$32,500 per year; Secretary of Bankmg-$:35,000 per year: Attorney General-$40,000 per year; Commissioner of State Poltce-$37 :500 per year: Secretary of Revenue- $37,500 per year: and Insurance Comm1ss10ner-$35,000 per year. As will be discussed more fully below, the salaries of other cabinet officials are not in issue here because of the constitutional prohibition against increasing salaries of officials during their terms of office. 3 These regulations permitted certain yearly increases for the above listed pos1.t1ons. Ho.wever., despite these.allowed increases. the salaries being paid these cabinet offic1als .. with the exception of the Secretary of Education, did not equal the statutorily f1 xed amount. OPINIONS OF THE ATTORNEY GENERAL 111 date of the November Report. The only remaining question involves an interpretation of Arti- cle III, §27 of the Pennsylvania Constitution which states: "No law shall extend the term of any public officer, or in- crease or diminish his salary or emoluments, after his elec- tion or appointment." It has been suggested that because of the intervention of Federal wage controls which have prevented increases in the salaries of the six cabinet officials in question, which increases would otherwise have been paid under the terms of Act No. 8, the Commonwealth, upon lifting of the controls, cannot now increase the salaries of the six cabinet officials in view of Article III, §27. A reading of that section indicates that this suggestion is without basis. First, that section states "no law" shall increase or diminish salaries of officials during their term of office. As pointed out above, Act No. 8, and Commission Reports issued and effective un- der that Act, did not increase salaries, and were carefully drafted to assure that no increase was authorized by law during the term of office of any affected official. See Baldwin v. City of Philadelphia, 99 Pa. 164 (1911). Secondly, the intervention of a higher authority, i.e., the Federal Government and its economic stabilization program, merely suspended, by virtue of Federal supremacy in the field of wages and prices, the effect of Act No. 8 and Reports issued pursuant thereto. Article III, §27, is concerned with "salary grab" legislation enacted by the General Assembly to increase salaries before the voters have a chance to speak on the subject. See In re Hadley, 336 Pa. 100 (1939). Viewed in this light, Article III, §27 does not operate to prohibit salary increases authorized by legislation tailored to avoid the prohibitions of Article III, §27 but suspended by subse- quent federal action. Finally, the Federal Economic Stabilization Program can be viewed as diminishing the salaries of cabinet officials during their term of office, a result, if imposed by state legislation, condemned by Article III, ~27. As noted above, six cabinet officers had their salaries properly increased prior to the commencement of their term. The Federal wage controls barred, in part, those salary in- creases. It would be grossly unfair, and certainly violative of the spirit of Article III §27 now to say that because of intervention of the Federal Gover~ment those salaries must remain at the lesser level. Pursuant to Section 512 of the Administrative Code, 71 P.S. §192, we have requested comments from the Treasurer and Auditor General. We received their comments which are concerned with the effect of Senate Resolution 100 on the June. 1972 Report and the 112 OPINIONS OF THE ATTORNEY GENERAL effective date of the November Report. We concur in these com- ments and the opinion has been revised accordingly. CONCLUSION It is our conclusion and you are hereby advised that with the ter- mination of Federal wage controls on April 30, 1974 you must carry out the mandates of A~t No. 8 of June 1~, 1971 an_d Reports issued pursuant thereto, and mcrease the salaries, effective May 1, 197 4, of the cabinet officials appointed subsequent to the effective dates of those reports. 4 Very truly yours, Peter W. Brown First Deputy Attorney General