The Superintendent Salary Cap: Penny-Wise and Pound-Foolish

March 20th, 2013  |  by  |  Published in Budget and Tax Policy, Editorials & Op-Eds, NJPP Blog: As a Matter of Fact ...  |  8 Comments

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Editor’s Note: This is the first blog entry by new NJPP Research Fellow Richard Snyder, who will focus on education policy. He was a member of the Ramsey Board of Education for 18 years, and sat on the New Jersey School Boards Association Board of Directors. He is also the founder and former executive director of Dollar$ & Sense Education Advocacy.

This post also appeared as an op-ed in the March 25, 2013 edition of the Bergen Record.

Sometimes I agree with those who say, “There’s too much government in my life.”

Using the broadest possible paintbrush, New Jersey in 2010 decided that school superintendents make too much money. In response to the misbehavior of very few and the demands for relief, the administration decided to set an upper limit for superintendent’s salaries. The cap is set at the governor’s $175,000 salary; why that’s appropriate I don’t know.

What I do know is that I’ve invested heavily in my town, Ramsey. I bought my home here. I pay a property tax bill that is substantial. Our school district has an annual budget of nearly $55 million. To protect my investment, I want the best executive we can get. A highly qualified potential star of the future isn’t what I want.

But we’re told that we can’t pay the school district’s CEO what the market and the taxpayers of this town thinks he or she is worth. I don’t like that one bit. It’s our money, our town, and our kids. It should be our decision.

So what does the cap on superintendent salaries really save, and what does it really cost? When dollars are used to drive a decision, it is how the numbers are spun that determines public perception. Evaluating the decision requires an analysis that looks at all sides of the issue.

On the generous side, we can estimate that the superintendent’s salary cap saves every district $50,000 per year. Based on the 550 districts that employ a superintendent, the total annual savings would be $27.5 million. (This is well beyond what the governor projected when he implemented the cap.) That sounds like a very worthy goal.

But what if we spin it another way, and compare that $27.5 million in savings to the approximately $25 billion New Jersey spends each year for PreK-12 public education, (the state’s $9 billion dollar education budget plus $15-16 billion from property taxes). If we do that, the savings is less than 0.2 of one percent. In short, the savings is invisible, as in bupkis.

We can also look at a per-child basis. With about 1.3 million children in our schools, we achieve a savings of approximately $21 per child – on an overall cost of about $17,000 per child. That works out to a little more than one-tenth of one percent in savings. Doesn’t sound like such a worthy goal. Don’t rule it out though, at least not until we know what it costs to achieve these savings.

To evaluate this decision, let’s first look at the plus side: I’m going to have my tax burden reduced by $21 for each child in the district.

On the downside, many experienced New Jersey superintendents – our state’s educational leadership – are opting for early retirement or fleeing to other states. There is an active market for talented leadership. Since the regulation was enacted, Bergen County alone has lost 16 very accomplished superintendents. Some went across the state line to New York, one went to be a principal in elsewhere in New Jersey. Ten others, to the best of my knowledge, just retired. These crucial leaders are usually replaced by interim superintendents or young and inexperienced educators. Experience and institutional memories vanish. It makes me worry about my investment. The quality of the public schools is the most critical factor in protecting my investment in my home and my community. When the schools meet their goals, the equity in my home grows and local business has a chance to prosper.

I’m also a parent, and I worry about how these changes affect my children. This demand for increased rigor in our schools is widespread. Combine this with the need to meet changing 21st century conditions and increased poverty across the country. I’d say that the need has never been greater for experienced leaders.

At organizations of all kinds, it’s the leadership that makes the difference. Huge corporations, sports teams, states and local communities, even the local chorus: They all make do with less when there is effective leadership. Education researchers say the impact of leadership is second only to quality teachers and curriculum. Isn’t it logical that I would want the best possible leader for our schools?

Constant effective leadership is even more important in education than in many other businesses, because the human stakes are so high. Sports teams can “re-build” after a bad season; the next year they will have higher draft pick and be a better team. Companies can decide to take a write-off and suffer the short-term loss; dollars can be made up in future years. But what students lose today while others are “getting their house in order” can never be made up. Are we willing to write off a generation of children while the grown-ups get their house in order?

The superintendent salary cap has been in place for nearly three years. It’s time for the Commissioner of Education to assess the true value of quality leadership, compare that to the $21 per child per year that New Jersey’s parents save due to the cap, and return the decision on leadership to local school boards.


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Responses

  1. Rob Zidar says:

    March 21st, 2013at 8:55 AM(#)

    Comparing a Superintendent to a CEO is disingenuous since a school board has no profit motive; in fact it’s almost the opposite in practice – a money grab. I’m sure you saw the following study: http://bit.ly/UCp934 From 1950 to 2009 in U.S. K – 12 education:

    The number of U.S. students grew 96%
    The number of U.S. teachers grew 252%
    The number of administrative and other staff grew 702%

    Quote from the study

    “There is no evidence in the aggregate that the increase in public school staffing caused student achievement to improve.”

    I don’t have the data but one can imaging that administrative compensation costs grew at least as quickly. Capping the Superintendent salary, while at a seemingly arbitrary level, is a good place to start.

  2. jane toll says:

    March 21st, 2013at 1:45 PM(#)

    I appreciated this important and thoughtful commentary. Too bad more people don’t “get it”.

  3. Richard says:

    March 21st, 2013at 4:45 PM(#)

    Rob, I thank you for reading and writing. You are my first.
    Please consider that the salary cap for school superintendents is actually a cap within a cap. The 2% tax levy cap restricts overall spending. A superintendents salary has to be within that limit whether there is a salary cap or not. In addition, districts have a cap on “administrative” spending. Many districts, mine included, are well within that limit regardless of the superintendent’s salary.
    The study you refer to provides a countrywide assessment. If you look at New Jersey, you’ll see that we do very well. That’s part of the point. We have learned our lessons and should be trusted accordingly.

  4. Richard says:

    March 21st, 2013at 4:46 PM(#)

    Jane, I thank you very kindly. I will continue to do my best.

  5. Susan Cauldwell says:

    March 22nd, 2013at 9:51 AM(#)

    Comparing superintendents to CEOs is tricky. CEOs can dump a product that is poor performing or consuming too many resources. Superintendents, and by extension, public schools cannot. This makes a superintendent’s job more difficult than a CEO’s job. Every year new rules and regulations on operations, education, assessment, etc., emanate from Trenton and Washington, further straining the budgets of school districts. Yet, the district’s obligation to ensure every child has a thorough and efficient system of education remains in tact. Pound wise and penny foolish, along with usurping local control, is how I view this short-sighted law.

  6. Richard says:

    March 22nd, 2013at 10:12 AM(#)

    Susan, how right you are. Thanks for writing. Borrowing words from Jamie Vollmer, “I have learned that a school is not a business. Schools are unable to control the quality of their raw material, they are dependent upon the vagaries of politics for a reliable revenue stream, and they are constantly mauled by a howling horde of disparate, competing customer groups that would send the best CEO screaming into the night.”

  7. Matt Lee says:

    March 22nd, 2013at 1:20 PM(#)

    Rob…have to disagree with this:

    “Capping the Superintendent salary, while at a seemingly arbitrary level, is a good place to start.”

    Capping the superintendent, without ALSO capping other administrative salaries (business administrator, principals, etc.) is extremely short-sighted and
    causes the imbalance in the administrative structure that serves to:

    1) discourage talented individuals from moving to the top job so that they can continue to realize annual salary increases

    2) pushes capped supes out of the market and into neighboring markets where they can at the very least hope to make more money year over year

    The fact that this cap only applied to supes underscores the notion that this was less about actual costs and more about the governor “slaying the dragon” (one that he helped create) and rescuing us all.

    Also, Rob with this statement:

    “I’m sure you saw the following study: http://bit.ly/UCp934 From 1950 to 2009 in U.S. K – 12 education:

    The number of U.S. students grew 96%
    The number of U.S. teachers grew 252%
    The number of administrative and other staff grew 702%

    Quote from the study

    “There is no evidence in the aggregate that the increase in public school staffing caused student achievement to improve.”

    …what is not accounted for is the massive amount of bureacratic overhead that public schools took on in that period, which accounts for a good deal of administrative growth. An explosion of mandated testing, the exponential growth of special ed, environmental oversight, massive build outs as the population shifted to the suburbs, the transformation of schools into virtual social service agencies, all happened during this period. All required oversight and all mandated by the STATE. I’m not arguing against these facets of education by any means, but I am saying that your statement needs to consider all this when discussing administrative growth.

    Rich, this statement you made is not really true:

    “The 2% tax levy cap restricts overall spending. A superintendents salary has to be within that limit whether there is a salary cap or not.”

    The cap on the tax levy is just that, a cap on the total levy. Within the budget, individual line items are not held to a 2% cap. So, theoretically, if a supe had negotiated a 3% raise (if he or she indeed COULD negotiate a raise) the extra 1% would need to be spread across other items in the budget to accommodate what was in excess of the cap.

    By way of full disclosure, I am a board president in NJ, a 17 year board member, and all opinions expressed here are strictly my own.

  8. Rob Zidar says:

    March 23rd, 2013at 11:53 AM(#)

    Thanks Matt. I think the whole system should be overhauled, not capped, by the way. I have 3 kids in the system and there aren’t many things that I care about more than their education.

    Richard, I’m not trying to be difficult, but just because an entity spends within a budget or other limitation does not mean that they are spending wisely or frugally. I understand that some of it is mandated at the State or Federal level, but as a consumer of these services as well as someone who pays for them by way of very high properties taxes, I think I have a right to the opinion that overall spending levels do not receive enough scrutiny. If they did, I don’t think that administrative headcount would have been allowed to exceed student headcount by such an amount.

    Perhaps it’s unfair to focus on one line item in a district’s budget (the Super’s comp) but as I said I’m glad someone is starting somewhere.

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