Leading New Jersey's
Schools
Has Its Price: High
By RICHARD LEZIN
JONES, New York Times, From the Web, March 20, 2006
TRENTON, March 13 — Local
school boards in New Jersey, driven by stiff competition for top-flight
administrators, have given them "questionable and excessive" compensation
packages that cost taxpayers millions of dollars and are often hidden from
public view, according to the results of a review by state officials released
Monday. (SCI Press Release)
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The review, by the State Commission
of Investigation, examined the payrolls of dozens of school districts and found
that boards of education around the state have lavished officials with cars,
computers, cellphones, improper pension increases and donations to tax-deferred
annuities. Superintendents and other top administrators received, on
average, extra compensation that was valued at slightly more than $70,000 over
their base salaries, the state found.
In one instance, the superintendent of a district in Bergen County was granted
nearly $600,000 in payments for unused sick time, vacation days and compensatory
leave over five years, including $300,000 that was paid to his estate upon his
death. And several leaders of relatively small districts earned hundreds
of thousands of dollars more than New Jersey's education commissioner, whose
salary, under state law, cannot exceed $141,000.
State investigators also found that school boards often tried to shield generous
compensation packages for administrators by either understating their value or
failing to draft written contracts that spell out the terms of such agreements.
Investigators, citing "a range of questionable and excessive practices" by
school boards, said the competition for highly rated administrators had driven
some districts to stretch rules on cashing in unused vacation time and to engage
in often improper pension manipulation.
"It is a system that seems designed to pit school districts against each other
in a 'sky's the limit' contest to recruit and retain top personnel,"
investigators wrote in their 71-page report. "All too often, the result is
an unseemly spectacle reminiscent of sports teams and their competition for
free-agent athletes — with the cost, of course, underwritten not by fans and
corporate sponsors, but by taxpayers."
The report, whose findings were drawn from payroll and other records from a
sampling of 71 of the state's 616 school districts, said lax enforcement of
pension guidelines and poor oversight of local school boards had cost New Jersey
residents millions of dollars in unjustified expenses.
The state provides about $7.7 billion in taxpayer money each year to help pay
for public education. About $20 billion of the roughly $34 billion
collected through property taxes each year is also used for schools.
The report suggested that state officials take measures to ensure that
expenditures by school districts are reasonable and appropriate and that
citizens are adequately informed about how their money is spent.
Those who advocate property tax reform could not agree more. "It smells
like corruption," said Bill Brown, a resident of Glen Rock and a member of the
New Jersey Coalition for Property Tax Reform when told of investigators'
findings. "Far too much is spent on administration and to cut these
excesses in administration would probably mean savings to taxpayers or produce
more money to spend on students needs."
Through a spokesman, Gov. Jon S. Corzine promised a thorough review of the
report and its recommendation that school boards and pensions be held to greater
oversight.
"This report raises significant and troubling issues of systemic abuse that
occurred before Governor Corzine took office," said Anthony Coley, Mr. Corzine's
press secretary. "The administration will analyze these findings
thoroughly and will work with the appropriate authorities to ensure that public
dollars are spent appropriately and wisely."
The leader of a state group of school administrators argued that the
compensation packages simply reflected the market value of the state's best
school leaders.
"In response to an argument that they are overpaid, I can only say that they are
paid at the level the local board believes they should be compensated," said
Barry J. Galasso, executive director of the New Jersey Association of School
Administrators.
He said the market for school officials was driven by several factors, including
the vacancy rate — there are now as many as 50 superintendent openings around
the state, he estimated — and the removal of a tenure provision in state law in
1991 that allowed administrators to shop themselves around more freely.
"The bottom line is that superintendents didn't have this kind of mobility"
until the early 1990's, Dr. Galasso said.
Frank Belluscio, a spokesman for the New Jersey School Boards Association, said
the report offered a stark look at how at how salaries and benefits had grown in
the years since the tenure provision was removed. He suggested that a
limit on compensation by the State Legislature, was in order.
Investigators found that from 1997 to 2004, the average salary paid to top
administrators rose by 31 percent, more than twice the increase in the average
teacher's salary — 14 percent — over the same period.
The reported cited the compensation package of John Greico, the superintendent
of the 25,000-student Bergen County vocational school district, who received
$580,000 for unused sick time and vacation from 1999 until his death in 2004.
Mr. Greico's estate was paid $327,881 from a tax-deferred annuity after he died.
There was also the compensation given to Thomas C. McMahon, superintendent of
the Barnegat Township School District, which serves about 2,200 students in five
schools.
According to investigators, Dr. McMahon's base salary was $166,228. In
that same year, he was given nearly $100,000 in additional compensation,
including about $43,000 for work as the district's business administrator, more
than $15,000 for cashing in unused leave and an $8,000 payment to a tax-deferred
annuity.
"It's a demanding job, 24 hours a days, seven days a week," Dr. McMahon said in
an interview Monday when asked about his earnings. "It raises the
question: 'What's education worth?' "
Dr. McMahon, who said he also favored a compensation limit, deflected the
suggestion that his school board had tried to hide the size of his compensation
package. "My salary is published every year on the front page of The
Asbury Park Press," he said.
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