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Sep 9, 2016 4:29 PMPublication: The Southampton Press

Cap Slows Increase Of School Administrators' Salaries Statewide, And Locally

Springs School Superintendent John Finello and Interim Business Administrator Carl Fraser.
Sep 12, 2016 12:32 PM

When John Finello, the Springs Union Free School District superintendent of schools, sat down with Board of Education members earlier this year to formulate this year’s budget, he did something virtually unheard of on the East End: He agreed to cut his salary.

Mr. Finello realized that if he hadn’t, in order to meet the state’s property tax cap, the district would most likely have to cut programs for its students. And, to him, that was unacceptable.

So the veteran administrator decided to not only forgo a raise guaranteed under his employment contract but to reduce his $215,000 salary by $15,000.

“The superintendent felt it was necessary to set the example,” the district’s business administrator, Carl Fraser, explained. “And, as a leader, to make a point that we don’t have much wiggle room.”

While the state’s 2-percent cap on tax levy increases has hit most area districts hard since it was enacted by Governor Andrew Cuomo in 2011, so far Springs is the only local district to cut its superintendent’s salary.

But other districts might not be far behind. The rate at which school superintendent salaries in the state increase year to year is trending downward, according to figures provided by the State Education Department.

The governor’s office sees the tax cap, introduced in 2011, as a success, significantly quelling what his office has described as an unsustainable trend of ever-increasing property taxes used to support school districts and local municipalities across the state, according to a report released by his office in 2015. The tax cap was extended last year through 2020.

The tax cap limits increases to a district’s tax levy—the total amount of money collected by the district through property taxes—to 2 percent per year, or the rate of inflation, whichever is less. District residents continue to retain control of spending, however, as the law allows district voters to pierce the tax cap with a 60-percent vote in annual school budget elections.

On the East End, burgeoning property taxes have often been attributed to the overall high cost of living, and a mass exodus of the younger generations, who flee to more affordable regions of the country after college.

While most residents see educating the community’s children as a necessary and noble function of society, a rising tide of criticism over the years has centered on school spending, and, in particular, what school administrators are paid.

The average total compensation—salary, benefits and other perks—paid to school superintendents across the state has continued to increase throughout the past decade. The average in 2007-08 was $185,250, and it climbed steadily to $219,520 for the 2016-17 school year. School superintendents in the 10 highest-paying districts in the state, primarily in Westchester and Nassau counties, will earn between $380,000 and $477,000 this school year.

But the rate at which the average salary package has increased from school year to school year has slowed to a mere crawl. The rate of increase averaged between 2 and 4 percent each year prior to the tax cap, with some more modest annual increases during the recession. For the past three school years, however, the rate of increase was 1.82 percent in 2014-15, 0.72 percent in 2015-16, and a mere 0.40 percent for the current school year, an analysis of state data by The Press found.

An analysis of the 10 school districts with the highest reported compensation each year throughout the past decade showed a significant decrease in what wealthier districts were paying their top administrators. The average of the 10 highest paid superintendents in the 2007-08 school year was $367,822. That number steadily increased through 2012-13, to $426,977, but then dropped a half-percent the following year to $424,928, and dropped an average of 1.5 percent each subsequent year to its current $410,078.

While the tax cap might eventually prompt an overall reduction in what administrators are paid, progress may be slow, surmised Westhampton Beach School Board President Suzanne Mensch. She noted that districts are bound by employment contracts with their current superintendents, who, in most cases, they want to retain.
 

East End School Superintendent Compensation 2007-08 to 2016-17
Create bar charts

“You don’t get the instant effect—you only get it when people retire,” Ms. Mensch said, adding, however, that, “It’s important for us to have good, qualified people working for us.”

In her district, Superintendent of Schools Michael Radday, who was hired at a salary of $210,000 in 2011, is limited to a 1-percent annual increase in salary, according to his contract. He also agreed to a salary freeze in the 2013-14 school year.

“It was a particularly difficult budget year, and many folks made sacrifices to ensure that we could maintain as many academic and extracurricular programs for our students,” Mr. Radday said. “I wouldn’t be opposed to doing the same in the future if budget conditions warranted.”

Mr. Radday will be paid a salary of $222,876 this year, with an additional $59,419 in benefits and $6,000 in perks, for a total compensation package of $288,295, according to the state data.

“As the job is becoming more complex, there is also downward pressure on salaries due to the tax cap,” Mr. Radday said. “It is a difficult balance that boards of education need to manage. I feel very fortunate to work in a community that values public education and supports its public schools. I have very realistic expectations regarding future salary increases and I am grateful for the salary I earn.”

The 67 school districts in Suffolk County, to date, may have been less affected by the cap when it comes to superintendent salaries, compared with the rest of the state. The average school superintendent compensation for all of the districts for the past 10 years has remained somewhat steady, increasing incrementally each year from $225,947 in 2007-08 to $272,571 in 2015-16, before dropping slightly to $269,472 in 2016-17.

However, according to the governor’s office, school spending decreased significantly in the county. From 2000 to 2010, the average annual growth rate in spending was 5.6 percent. But in the first three years since the tax cap was enacted, that growth rate was reduced to 2.1 percent, resulting in an estimated cumulative savings of $1,588 per taxpayer.

The 16 East End school districts showed a similar pattern as the county, with average compensation increasing steadily from $225,621 in 2007-08, to $271,959 in 2015-16, before dipping slightly in 2016-17 to $268,831.
State Assemblyman Fred W. Thiele Jr. noted that the East End might be different from other areas of the state, which could explain why it so far seems to be bucking the trend. Due to the ever-burgeoning Hamptons property values, the overall assessed value of the area continues to grow at an incomparable rate. That affects the formula used to determine how much individual districts can increase spending and still fall within the tax cap.

Additionally, the makeup of East End districts—which tend to be wealthier and smaller—make it easier to convince voters to pierce the cap if necessary, he said.

“On the East End, I represent 21 school districts,” Mr. Thiele noted. “Of those, 13 have less than 1,000 students, and 10 don’t have high schools. That’s different from most areas. It makes it harder to comply with the tax cap.”

Additionally, because of the high property values—and subsequent elevated cost of living on the East End—districts feel they need to pay higher salaries, he said. “You’re trying to attract the best candidates, and the cost of living is so high,” Mr. Thiele said. “You’re competing to get the best person, but you have to consider the housing costs. You want them to live in the community. There are factors in play on the East End that just aren’t there in the rest of the state.”

But in the more blue-collar Springs district, which does not enjoy the same high property assessments as some of its Hamptons neighbors, it’s been more of a struggle, Mr. Fraser said.

The district was limited to a 1.3-percent increase in spending for this year, compared to last year, he said. The tax cap is based in part on the consumer price index, which was 0.12 percent this year, and is not a true 2-percent tax cap, he noted.

“When the tax cap was implemented in 2012-13, the idea was that it would be a 2-percent cap,” he said. “But it’s not a 2-percent cap. Each year, it’s based on the Consumer Price Index. We’re being hurt by the CPI. If an adjustment was made in the law to make it more stable, we’d be in better shape.”

While the district hasn’t depleted its reserves, it’s had to utilize its savings in previous years in order to make the tax cap work, Mr. Fraser said. If something doesn’t change, he said, “someday we’ll hit rock bottom.”

In the meantime, Mr. Fraser said, decreasing the superintendent’s and other administrators’ salaries was a good start.

The Springs superintendent, Mr. Finello, will receive a salary of $200,000 this year, with benefits totaling $11,000, for a total package of $211,000. The district is not required to pay him certain benefits because he had previously retired from another school district and collects retirement benefits from that position. This will be his last year with the district; he announced his retirement over the summer.

When the superintendent agreed to a pay cut, Mr. Fraser, an interim administrator who earns $750 per day, followed suit. He agreed to reduce his own compensation by $10,000 next year.

Principal Eric Casale and Assistant Principal Christine Cleary agreed to bypass their own contractually guaranteed raises, freezing their salaries at $157,00 and $120,000, respectively—for the second year in a row.

“It’s really tightened up the operations,” Mr. Fraser said. “We were able to save student programs.”

Mr. Fraser said he wonders why other districts aren’t doing the same. “When you see salaries increasing and programs decreasing,” he said of other districts, “you wonder when administrators will realize there needs to be some givebacks.”

Other local administrators said, however, they were mindful of the effects of the tax cap and the need to limit spending and administrative costs.

Sag Harbor Union Free School District Superintendent of Schools Katy Graves, who was hired by the district in 2014 at a salary of $215,000—after leaving the Stamford New York Central School District, where she earned an annual salary of $114,000—said she had asked her board to limit her salary increase as they negotiated a new contract.

“Personally, I have already requested to the board that when they negotiate my salary for this year that it be under a 2-percent increase just to reflect where we are as far as the tax cap,” she said, noting that she also pays 25 percent of her health insurance costs. “That we be thoughtful about the tax cap.”

Ms. Graves will have an annual salary of $220,375 next year, with $62,055 in benefits, for a total package of $282,430, according to the state data.

Mr. Thiele, the state assemblyman, noted that while he would prefer to see smaller school districts consider consolidation to reduce spending, he conceded that in some instances, the tax cap may be driving down some administrative costs.

“It’s my impression that school districts have had to limit the amount of spending,” Mr. Thiele said. “They look at everything to do that, mostly non-mandated costs like administrative costs. The driver of this is clearly the tax cap.”

Ms. Mensch, the Westhampton Beach board president, said the tax cap “has good effects for the taxpayers.”

“We’re really looking at every expense,” she said. “I think overall Westhampton Beach has worked very hard to keep our spending down since the tax cap was implemented. The basic effect of the tax cap is that every board is going to take a long, hard look at every expense.”

An original supporter of the tax cap, Mr. Thiele said he always looked at the essence of it as a “three-legged stool,” incorporating the tax cap, increases in state aid—both of which the state has helped to achieve—and the elimination of some state-mandated costs for districts, which the state has failed to do, he said.

“The tax cap is extremely popular,” he added. “People think it’s working. You’re not going to see any changes.”

 

 

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Cuomo should be congratulated for beginning the process of controlling school budgets. The pork barrel at top is still absurd. Amagansett UFSD has a superintendent and a principal for a very small student population. The money wasted there could easily be reallocated or cut. More needs to be done. All these salary shennigans are fluff. School boards need to more proactive in addressing these absurd salaries and ALL the benefits buried in the fine print. In addition, unfunded pension liabilities ...more
By Amagansett Voter (62), Amagansett on Sep 16, 16 9:28 AM
This is not true in the least. Those salaries are negotiated with union bargaining units and increases are built in for years. Cuomo and his corrupt and incompetent department of education would like you to believe that it's not the kids that are getting hosed.

It's not the CAP that is regulating salaries, as highlighted in the article- it's voluntary and NOT the norm. In the absence of someone taking the highly unlikely step of sacrificing guaranteed income - NY State Law guts services ...more
By SlimeAlive (1181), Southampton on Sep 16, 16 12:11 PM
Is the position of SUPERintendant even necessary ?! How about farming out the "duties" on a per diem basis?
By bigfresh (4666), north sea on Sep 16, 16 12:12 PM
Want to really save some money put a "Morals Clause" into their contracts. Screw up and no pension, golden parachute or hush money.
By bird (829), Sag Harbor on Sep 16, 16 1:45 PM
3 members liked this comment
Go to seethroughny.net and check out his contract. He gets his salary paid through 2018 even if he dies. His estate gets it. The school puts in $11,000 per year into a tax sheltered annuity. It doesn't come out of his salary. He gets 40 vacation days a year, not including holidays and school recesses. He gets 34 sick days per year and 10 personal days. He also gets a stipend for expenses of $750 per year. He doesn't get health insurance but I am sure he gets it from another district for life. What ...more
By Babyboo (293), Hampton Bays on Sep 16, 16 5:42 PM
Finello, John J Huntington Union Free Schools,Suny at Stony Brook (28050) $207,721 NYS Teachers Retirement System 7/1/2011

Year2013
Finello, John J Huntington Union Free Schools,Suny at Stony Brook (28050) $207,721 NYS Teachers Retirement System 7/1/2011

Year2014
Finello, John J Huntington Union Free Schools,Suny at Stony Brook (28050) $207,721 NYS Teachers Retirement System 7/1/2011

Year2012
Finello, John J Huntington Union Free Schools,Suny at Stony ...more
By Babyboo (293), Hampton Bays on Sep 16, 16 5:47 PM
Finello, John J Huntington U)ion Free Schools,Suny at Stony Brook (28050) $207,721 NYS Teachbrs Retirement System 7/1/2011

Year2013
Finello, John J Huntington Union Free Schools,Suny at Stony Brook (28050) $207,721 NYS Teachers Retirement System 7/1/2011

Year2014
Finello, John J Huntington Union Free Schools,Suny at Stony Brook (28050) $207,721 NYS Teachers Retirement System 7/1/2011

Year2012
Finello, John J Huntington Union Free Schools,Suny at Stony ...more
By Babyboo (293), Hampton Bays on Sep 16, 16 5:47 PM
1 member liked this comment
Unbelievable. Insane.
By AngelaGomez-Caldone (16), on Sep 16, 16 9:13 PM
Well, that's one way to kick inflation and Fed money printing in the a***.

However, you have only dried up a drip...
By Mr. Z (11847), North Sea on Sep 16, 16 11:42 PM
Okay, I read just the first few sentences of this story but, $215,000 for the Springs Superintendent? They have ONE school. What does he do that the principal can't do? I'm guessing Montauk also pays a Superintendent some crazy salary along with East Hampton? Maybe it's time to eliminate those positions or create a single district and eliminate all the redundant jobs and take advantage of the economies of scale?
By Rich Morey (378), East Hampton on Sep 17, 16 1:34 AM
1 member liked this comment
People would be more tolerant of the salaries if these carpetbaggers weren't such morons
By even flow (1023), East Hampton on Sep 17, 16 9:41 AM
It's disgusting for a retired superintendent to have a $207,000.00 per year pension and healthcare for life. It's beyond disgusting for this greedy pig to collect that pension, courtesy of the NYS taxpayer, and make $200,000.00 a year at the same time. Millionaire municipal workers are becoming the norm.
By Babyboo (293), Hampton Bays on Sep 17, 16 2:00 PM
Not the superintendent, the School Board. Spending your money. They can put a lot in the contract, morals, parachute etc. If they don't like the contract, keep searching. Don't buy the pig in the poke...
By knitter (1941), Southampton on Sep 17, 16 6:45 PM
The link to the survey "compiled by the press" comes directly from the NYS Dept. of Ed website. You mean "downloaded by The Press and used without attribution," don't you?
By fire11 (276), east hampton on Sep 17, 16 6:49 PM
Sickening, really.
By Lets go mets (377), Southampton on Sep 18, 16 6:17 PM
Wow, this guy has chutzpah. 207k per year pension and setting an example by foregoing 15k
By C Law (354), Water Mill on Sep 20, 16 8:58 PM