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5-18-15 Education in the News - Vote in Senate on Salary Caps...Pension Reform Effort

NJ Spotlight - Up for Vote, Senate Bill Would Strike Down Superintendent Salary Caps…Measure raises important question: How many Senate Republicans will line up to go against one of Christie’s early educational reforms?

John Mooney | May 18, 2015

It hasn’t gotten as much attention in the din over PARCC testing, but a bill that would end New Jersey’s controversial caps on superintendent pay up for a key vote today.

The state Senate posted the bill before the full session today, a test of not just its support in the upper house but also how far Republicans will go to back -- or buck -- Gov. Chris Christie on one of his earliest education initiatives.

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Senate Bill S-1987

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Sponsored by state Sens. Paul Sarlo (D-Bergen) and Teresa Ruiz (D-Essex), the bill would prohibit the state from setting salary limits on school superintendents, effectively ending the caps imposed in 2011 that put a ceiling on superintendent pay, depending on the size of the district.

The bill appears to have strong Democratic support in the Senate, where it passed both the Senate’s education and budget committee. But Republicans have so far either voted against it or abstained, raising doubts that the Democrats will have enough votes to override a possible veto from Christie.

The vote comes as there have been some discussions behind the scenes as to if and how the caps would expire in 2016, opening the possibility of a phase-out or even an extension.

An exchange on the topic arose at the Senate budget committee’s review last month of the administration’s education budget, when state Sen. Jennifer Beck (R-Monmouth) said the ceiling actually has led to some administrators in districts making far more than superintendents.

“Is the department looking at some kind of comprehensive policy that will deal with administrative costs?” Beck asked Education Commissioner David Hespe.

She said there was a time when superintendent pay rose too much, too fast, and grew “untenable.”

“But the cap is not thoughtful, especially when we have people working for these folks who are exceeding their salaries,” Beck said.

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Hespe said the department was in the midst of collecting data as to the impact of the caps that it would use to determine what’s next. Much of the debate -- and legal challenge -- has been about superintendents who have been driven from the job by the caps, but Hespe maintained that there have been other effects as well.

“What did we actually see?” Hespe answered. “Some of the things will surprise you. You will see there has been more diversity in the candidates. There have been more female candidates. There have been more minority candidates.”

Both Ruiz and Sarlo dismissed those claims, and said the administration should move on supporting their bill.

“We have literally had a brain drain in Bergen County,” said Sarlo. “We have superintendents quite literally taking up camp right outside of our borders, Rockland County, Westchester County.”

“We have more interim superintendents in Bergen County than we have ever had,” Sarlo said.

Then Sarlo called out the Republicans for failing so far to support eliminating the cap; Beck answered back that the bill was “too simplistic.”

“We had a problem where we are spending so much for superintendents in even tiny little districts,” Beck said.

“To me, I would prefer to see something comprehensive that wasn’t just superintendents, but also assistant superintendents and principals, and really have some standards in place.”

 

NJ Spotlight - Local Governments May Be Steering Clear of Christie’s Pension-Reform Roadmap…Concern is that Republican changes could drive up property taxes, already highest in the nation

John Reitmeyer | May 18, 2015

 

Nearly three months have passed since Gov. Chris Christie released his latest plan to cut the cost of public-employee pension and health benefits. And though Christie has been regularly making the case at town hall-style events for sweeping reforms, including freezing the current pension system and moving employees into less costly health-benefit plans, so far none of his proposals have won support from Democrats who control the Legislature.

But another key obstacle that has emerged is the lack of full support and cooperation that Christie’s proposals have generated from the local governments that would also need to play an important role in the overall reform effort.

Groups that represent school boards, county governments, and municipal governing bodies all say they have concerns about Christie’s proposed reforms, including how they could impact property-tax bills that are already the highest in the nation. They also question whether there’s enough time at this point to meet a June deadline set by a nonpartisan panel of experts that Christie convened to look at the benefits-affordability issue.

“The sand is running out of the hourglass,” said Bill Dressel, executive director of the New Jersey League of Municipalities.

Still, despite those overall concerns, there does seem to be some interest among the groups in finding ways to reduce the cost of employee health benefits. And defenders of Christie’s proposed reforms, commonly referred to as the “roadmap,” also note that whether this proposal makes it to the finish line or not, the costs for both pensions and health benefits are only going up and eventually will have to be dealt with.

Christie’s roadmap proposal -- outlined in a report released in February by the panel of experts -- calls for the state pension system’s $40 billion in debt to be paid off using savings realized by shifting employees to cheaper health coverage. That would also allow governments to avoid a federal tax on so-called high-cost Cadillac health plans that many public workers in New Jersey receive that’s due to be charged in 2018.

To keep from going deeper in debt, the current pension system would be frozen and all employees would be moved into a new retirement plan with features of a 401(k). And the pension debt would be paid down over decades using a payment schedule voters would be asked to endorse via a constitutional amendment that would go on the ballot this fall.

Winning support from Democratic legislative leaders and public-worker unions was always going to be an uphill climb for Christie after he decided last year to go back on a promise to increase state contributions into the pension system. It was his pledge to step up the state payments over a seven-year term to reverse two decades of underfunding that helped win support in 2011 for a reform law that also increased how much employees pay toward their pensions and health plans. The unions have sued Christie in an effort to enforce the payment schedule and a ruling from the state Supreme Court could come down at any time.

But Dressel said for local governments the property tax issue remains a key sticking point. For example, many towns are providing their employees with better health coverage than the State Health Benefits Plan but at a cheaper cost, so going to uniform plans would actually increase their costs.

Piscataway Mayor Brian Wahler said he would have a hard time going to his constituents and explaining why they have to pay higher property tax bills to help the state pay off its pension debt.

“Basically this is a bailout of the state by the municipalities and the counties,” said Wahler, who is also the president of the League of Municipalities.

Still, his organization has been looking closely at all of the issues raised by the benefits-review commission, setting up five different task-force groups to look at specific concerns, such as the impact the changes would have on local pension funds and the alarms the commission sounded about health benefits and the looming federal tax on high-cost health plans.

The league is preparing to come forward with its own findings next month, Dressel said.