Paul L. Caron

Tuesday, March 21, 2006

New Jersey Tax Cesspool: School Administrators Feed at Public Trough in State with Nation's Highest Property Taxes

The New Jersey State Commission of Investigation has released a remarkable report:  Taxpayers Beware:  What You Don’t Know Can Cost You -- An Inquiry Into Questionable and Hidden Compensation for Public School Administrators.  According to the press release:

The State Commission of Investigation (SCI) today issued the final report of a systemic investigation into questionable and hidden compensation for public school administrators and called for sweeping reforms to ensure full public disclosure, control and oversight of pay and benefit practices that cost New Jersey taxpayers millions of dollars every year.

Lucrative provisions of privately negotiated deals enable superintendents and others at the top tier of public school administration to receive compensation and benefits often well beyond the reach of any other class of public-service employees. It is not unusual for these arrangements to be structured such that they continue to benefit recipients with costly and, in some cases, irregular pensions and perquisites well into retirement.

The inquiry revealed numerous instances in which the prevailing system enables top school administrators to collect total monetary compensation – some of it obscured from public view – in excess of substantial salaries set forth in contracts. One particularly lucrative source of this added pay is the cashing-in of inordinate amounts of unused sick, vacation and other leave on annual basis and at retirement.

The Commission also found instances in which questionable or patently improper steps have been taken to inflate pensions by padding earnings throughout the course of employment, or in the years immediately preceding retirement, with an assortment of base salary add-ons, including cash stipends, bonuses and redemption of unused leave.

Further, an examination of data on income tax forms raises questions as to whether the full range of perks and payments received by administrators beyond base salaries are properly reported for federal and state tax purposes.

The report is particularly troubling since New Jersey schools are financed primarily through state and local property taxes, which the Tax Foundation reports are the highest in the nation.  Today's Wall Street Journal has a scathing editorial (Jersey School Scam) in response to the report.

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Remember Captain Renault from Casablanca? He steps into the back room of Rick's Cafe, and says, "I'm shocked, shocked to find that gambling is going on in here!" A croupier then hands him a pile of money and says, "Your winnings, sir." That's... [Read More]

Tracked on Mar 21, 2006 5:11:28 PM


Hey ohwilleke,

Can those CEOs and comedians and starlets reach into the pockets of anyone in the state to fund their salaries and retirements? No - they're subject to market whims, just like everyone else in the real world. Public employees aren't. That's the difference. People seem to forget that public workers work for us, not vice-versa.

I bet you're one of the "reachers", aren't you?

Posted by: BSing | Mar 21, 2006 5:24:02 PM

Horrors! Well paid school administrators. What will the world come to next? Well paid teachers?

When pro-athletes and college football coaches make outrageous sums, I worry. When CEOs of companies hurling towards bankruptcy as a result of bad management get paid multi-million dollar salaries, I worry. When obnoxious comedians and starlets get paid millions I worry.

But, when school administrators start earning the pay that the average tenured professor at a law school earns, I somehow feel less worried, not more.

Posted by: ohwilleke | Mar 21, 2006 1:35:29 PM

Why am I not surprized ?

Posted by: The NJ Annuitant | Mar 21, 2006 11:05:16 AM