Lawmakers use taxpayer-funded per diems to purchase Harrisburg-area homes

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HARRISBURG, Pa. (WHTM) – When lawmakers come from across the commonwealth to Harrisburg, they have to eat and they have to sleep.

Taxpayers pick up the tab for both through daily stipends called per diems, receipt-less reimbursements legislators collect when they show up in Harrisburg. It’s based on a federal formula, it fluctuates, but most recently, the per diem rate was $185 a day.

Representative Brian Ellis (R-Butler) describes himself as a fiscal conservative. He is in leadership. And he’s the overall leader in terms of per diem collection among House Republicans.

“I don’t think anybody in my area back home expects me to come out here for free,” Ellis said, noting it’s a roughly four-hour drive.

Ellis makes $97,310 in salary. ABC27 crunched numbers from a right-to-know request and found that in 2015, Ellis collected an additional $25,034 in tax-free per diems. Ellis attributes that to the budget impasse. He says it required him, as a leader, to spend more time than normal in Harrisburg.

But Ellis is right at home in the Capital City. He stays in a house he purchased 12 years ago for $95,000, according to tax documents obtained by ABC27. Through the years, he’s rented out rooms to fellow lawmakers.

“It’s just like any other property,” Ellis said. “I tell the Department of Revenue. They see it on my taxes. The federal government knows I have rental income and every year we have to fill out a state ethics form, so I put it on there as well.”

Ellis is not the only lawmaker owning a Harrisburg home. He says when he was first elected, he asked during orientation about living arrangements. He said he was told he had three options; stay in a hotel room, rent an apartment or house, or buy a house.

Ellis says he could afford to buy, so he and his wife opted for the latter option and considered it perfectly acceptable.

“You’re using taxpayer money to underwrite a mortgage, get a tax deduction and make a profit,” government watchdog Eric Epstein of Rock the Capital said. “At some point, I think a law has been broken.”

If that’s true, lots of lawmakers are lawbreakers because lots of them are doing it. There are too many names to mention, but notably, in the past, even Speaker of the House Mike Turzai (R-Allegheny) co-owned a home in Susquehanna Township.

“It’s wrong, any way you look at it,” Epstein insists. “I don’t care who did it before. It has to end now and in my mind, we need to have the IRS look into it.”

It is probably not illegal, but it is a pretty sweet deal.

In theory, lawmakers buy the house and use per diems to cover the mortgage, bills, and expenses. They can take in a fellow lawmaker or two, who pay their rent via per diems, and generate a profit. Eventually, they sell the house for more than they paid and pocket the extra.

Ellis admits that’s the theory, but it doesn’t always work.

“My house that I have is a 1,200-square-foot home, close by, and it’s actually decreased in property value in the time I’m here, so it’s not quite the lucrative real estate deal people make it out to be,” he said.

Should Ellis be criticized for being financially shrewd? After all, the taxpayer money’s being spent either way. Are lawmakers who get hotel rooms or rent apartments morally superior?

But there is one last question for the fiscally conservative lawmaker. Using tax dollars to pay off the homes of legislators, is that a good deal for taxpayers?

“I don’t necessarily think it’s a good idea for taxpayers,” Ellis admits. “That’s one of the things I pointed out. We didn’t know 12 years ago when my wife and I made the decision what the outcomes were going to be, how long we were going to be here. If I would have been here two years, four years, would I have seen any benefit from it? Probably not. Have I seen some benefit from it? Yes.”Get breaking news, weather and traffic on the go. Download the ABC 27 News App and the ABC 27 Weather App for your phone or tablet.

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