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Monday, October 11, 2010

On the Taxpayer Dime: The Lucrative Life of some Missouri Superintendents...Part Two

This is part 2 of the lucrative financial life of some superintendents. Part 1 chronicled the enormous salaries and benefits of several St. Louis area superintendents as reported by KMOV-TV. A brief recap:

  • Thomas Williams, Kirkwood School District, is the highest paid superintendent at $284,000 with benefits, with one of the smallest populations (5,000 students).
  • Steven Price, Hazelwood District, earns $235,00 plus benefits with 180 sick days granted to him even before he accepted the job.
  • Charles Penberthy, Brentwood School District, earns $216,000 plus benefits for a district numbering 809 students.
We wrote in our previous story:

"We are not casting dispersions on any of these superintendents. I don't believe KMOV questioned their capabilities or integrity as superintendents.
Taxpayers are demanding answers from their school boards regarding fiduciary responsibility in a recession".

We stand by our contention. Now let's talk about Part 2 which delves into more information on these lucrative salaries and benefits of some superintendents.

Here is a story published by the St. Louis Post-Dispatch on October 10, 2010. It reports on the incentives Missouri superintendents have to retire early and then be able to obtain employment in Illinois...thereby enabling them to receive pay from Illinois AND retirement benefits from Missouri at the same time. They are also eligible to take a lump sum from their districts, retire, then become employed again in the same district for financial personal gain.

Read the article and ask yourself if these maneuvers make sense for taxpayers. It's a great gig for the superintendents, but not so much for the people paying the bills for these public officials. Wouldn't you love to have lifetime health benefits for the rest of your life, and not have to pay for any of it? Jeff Spiegel, Ferguson-Florissant superintendent had that written into his contract at a potential cost of $218,000 to those taxpayers.

This is an excerpt from the Post-Dispatch regarding the lucrative funding and benefits afforded to superintendents:

Year by year, Missouri's educator retirement system has grown to be among the most lucrative in the nation. And the financial windfalls of the 1990s prompted the Legislature to expand benefits further, fueled by the retirement fund's swelling coffers.

From 1995 to 2001, the Legislature passed bills improving teacher pensions six times — every year except one. Each change cost hundreds of millions of dollars.

The goodies included early-retirement incentives in 1995, an 8.7 percent increase in base benefits in 1998, quicker cost-of-living increases in 2000 and a longevity bonus in 2001.

Now however, the piper must be paid:

The increases skidded to a halt in 2003, when the system reported that it had assumed its investments would return 8 percent a year but they had averaged less than half that over the prior five years.

Now, that system is facing severe economic strains because of the sputtering economy that has wiped out $5.3 billion in assets. The state is exploring options that would slash benefits for future teachers and superintendents.

The proposal on the table would reduce pensions for retirees with 30 years of experience to 60 percent of salaries, compared with the current 75 percent. And the normal retirement age would rise to 62, from 60, which could keep superintendents around longer.

But all the proposed changes would affect only those entering the system in the future. It will be decades before the provisions have a shot at increasing superintendent longevity.

So, it will be DECADES before superintendents can't pull these financial shenanigans any longer. The school boards who agree to these type of contracts should be voted out for financial malfeasance. A commenter on the Post-Dispatch site summed it up:

Public employee pensions like this are not only unsustainable, they are unconscionable.

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