Arbitrary pay limits for New Jersey public school administrators?

Posted on November 1, 2010



RE-POSTING MY JULY 16 ENTRY, WHICH HAS RENEWED RELEVANCE:

Public school administrators are an easy target. Almost any public employee making a “whopping” six figure salary these days is an easy target. Indeed most of the general public does not earn as much as a school superintendent. But, as I’ve pointed out in the past, it’s not necessarily appropriate to compare the general public average wage with that of school teachers or school administrators. It is obviously more appropriate to compare wages among similarly educated individuals and to compare them with others in the same labor market. This is much easier done with teacher salaries, because there are enough of them to calculate averages using census data which samples only a small portion of the population. It is more difficult with administrators 1) because there aren’t as many of them, so census data are less useful, and 2) because administrators may migrate further to take leadership positions – for example, from New York State to New Jersey, or even across the country for a large district superintendency.

I read today on NJ.COM that the Governor has proposed fixing New Jersey school district administrator pay according to the following scale, which adjust maximum salaries by school district size.

Proposed pay limits for school administrators
School enrollment / maximum pay

up to 250 / $120,000
251 – 750 / $135,000
751 – 1,500 / $150,000
1,501 – 3,000 / $165,000
3,001 – 10,000 / $175,000
More than 10,000 / to be determined by the Department of Education

As far as I can tell, these maximum salaries are completely arbitrary, but for pegging the highest to the Governor’s salary. Note that the Governor’s salary like the President’s salary is not based on any competitive labor market for Governors (e.g. the wage required to recruit/retain a high quality governor) or based on any negotiation. Governors’ salaries are pretty much arbitrary and the price in lost wages that one pays for being governor for a brief period in his/her career. So pegging salaries to the Governor’s salary on the basis that it somehow represents the competitive wage for the public executive with greatest level of responsibility is just absurd.

So, let’s take a look at New Jersey administrative salaries from a few different perspectives. Most of the analysis I present below come from previous posts, reports and analysis. Not much time for new content here today.

First – are New Jersey administrative salaries a major cost driver of school district budgets? Are they eating away at the edges of other spending categories? Here’s a chart from some analysis I did on New Jersey while still working at the University of Kansas (getting ready for my move). This chart shows us two things. First, between 1998 and 2005 (and similar in more recent years – not in chart), administrative expenses as a share of expenses have not climbed. Further, administrative expenses as a share of total expenses in the former Abbott districts were relatively low compared to other groups.

Second – relative to growth in regional non-teacher (non-administrator) wages, based on average wage growth in the National Center for Education Statistics Comparable Wage Index,  have district and school level administrator wages in New Jersey grown out of control?

This first graph shows adjusted wages for district level administrators. Hmmm… pretty flat. Some lag, followed by some growth for superintendents.

Okay then, how about those elite superintendents at the top of the New Jersey food chain? From 1997 to 2008, their wages grew to an average that exceeded $200,000. But again, adjusted for average regional wage growth, those wages were relatively flat over time.

Then what about New Jersey building level administrators? Well, actually, their wages seem to have declined slightly over time, but are also relatively flat.

Third - These figures don’t speak to the competitiveness of district or school administrator wages on the regional labor market, except to say that their wages have not become more competitive over time. How might we compare the competitiveness? One interesting comparison is to compare the wages of private independent school headmasters in New Jersey to superintendents in the districts that are home to those private independent schools. This chart is from my 2009 study on private school costs which I have discussed on many occasions in this blog. This graph shows that in most cases, the private independent school headmasters’ salaries far exceed those of local public school superintendents. Note that most of these private schools have between 500 and 1200 students, which on the pay scale above would put them at a maximum salary of $135,000 to $150,000. It seems that the private school marketplace has identified a somewhat higher wage than this for recruiting top leadership talent. And these salaries are now quite dated.

Migration between private independent school leadership positions and public school superintendency is not all that common, but not unheard of. It is more likely that New Jersey districts would be in a position to compete for top regional school leaders with nearby New York State school districts. Here’s an article from the New York Times from 2006 on administrator salaries in New York, which already far exceeded the proposed pay scale above: http://www.nytimes.com/2006/04/23/nyregion/nyregionspecial2/23weadmi.html?fta=y&pagewanted=all

And here’s a list of New York State superintendent salaries over $250,000 and between $225,000 and $250,000, from: http://www.emsc.nysed.gov/mgtserv/admincom. Most are in southern New York State.

And a quote from an earlier post of mine:

In Illinois, primarily in the Chicago metro area, 10 administrators exceeded the 300,000 mark – most working in affluent suburban districts. http://www.championnews.net/salaries.php. In Texas, the top 4 superintendents in 2007-08 were compensated over 300,000 in base salary.

So, let’s review:

  • New Jersey administrative salaries do not seem to be the major driver of school district budgets over time. They have not crept out of control and consumed larger shares of school district budgets.
  • New Jersey administrative salaries have not grown with respect to regional wage growth over time. Adjusted for regional wage growth, district and school level administrative salaries have been relatively flat.
  • New Jersey public school district superintendents tend to be paid much lower salaries than those of private independent school headmasters for private independent schools geographically located in their district. Further the private independent schools tend to be much smaller in enrollment than a typical public school district.
  • Relatively large numbers of nearby superintendents in New York State earn salaries in excess of the highest New Jersey superintendent salaries, and far in excess of the maximum on the proposed salary scales above.

These findings raise significant concerns about the proposed salary schedule above specifically and about the broader concept of “fixing” or capping school district administrative salaries. Districts must be able to adapt to the competitive labor market context.

The concerns raised herein don’t address the additional issue that the competitive wage for a school administrator might also vary widely within the state of New Jersey, from the New York metropolitan area to the Philadelphia or Atlantic City areas.

Declaring a wage to be “appropriate” does not make it so. Mandating non-competitive wages for school administrators may lead to significant recruitment and/or retention problems for New Jersey school districts. More likely, such mandates will lead to a plethora of new games to skirt the mandated caps.

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Posted in: Jersey