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Superintendent pay in OPS, other large districts would likely exceed limit proposed in Legislature

January 22, 2018 GMT

School boards in four large Nebraska districts and possibly others would have to cut their superintendents’ compensation under a proposal in the Legislature.

State Sen. Lou Ann Linehan of Elkhorn introduced the bill to cap superintendent compensation.

Under her Legislative Bill 851, a superintendent’s compensation would be capped at five times the salary and benefits of a beginning teacher in the same district.

The Omaha, Lincoln, Millard and Bellevue districts would exceed the limit, based on districts’ estimates of teacher compensation and the state definition of superintendent compensation on state disclosure filings.

All 244 districts in the state would have to abide by the limit. Most would come in under it, but the state’s biggest districts — those with the best-paid superintendents — most likely would exceed the cap.

Several districts in urban areas appear close to the limit. But it’s hard to tell if they would top it without more specific details on what would be counted as compensation and what would not.

The bill also would limit compensation for administrators of Nebraska’s educational service units.

Linehan said the bill is not just about reining in pay.

“There needs to be a leveling between the top people and the young kids getting out of college who we want to stay in this field,” she said.

Beginning teacher pay is low enough that some teachers meet government thresholds for poverty programs, she said.

The bill, set for a hearing by the Legislature’s Education Committee on Monday, is rankling local school officials.

School board members in the three largest districts — Omaha, Lincoln and Millard — say a cap would infringe on local control and hinder them from attracting and keeping the best superintendents.

Omaha school board President Marque Snow — whose board is searching for a new superintendent — said pay caps reduce the pool of applicants, whether you’re a school board recruiting a new superintendent or a college hiring a football coach.

“I wonder if we’ve ever had a bill to cap athletic directors’ or coaches’ pay,” Snow said. “We don’t do that because we need the best, and we need to be able to compete. You need the athletic director to have the autonomy to bring in top-notch talent.”

Last month Scott Frost became the highest-paid Nebraska football coach in program history. University officials and fans hope he can turn around the struggling team.

Frost’s seven-year, $35 million deal makes him one of the 15 highest-paid coaches in the sport.

Nebraska wouldn’t be the first state to try a cap. New Jersey, a state with a reputation for high taxes, implemented one in 2011. Critics say it prompted many superintendents to leave for greener pastures. The state eased the caps last year, but the state school boards association wants them repealed.

Linehan said the state has an interest in superintendent pay because of the state aid many districts get — particularly the largest districts, where aid can amount to half their revenue.

“I’m not arguing that these guys’ pay is unreasonable for their jobs. I’m just saying that it’s out of whack with other public sector jobs, and we can’t afford it,” Linehan said.

She noted that many superintendents make more than the governor — his salary is $105,000 — and U.S. senators and representatives — they get $174,000.

She said she would be willing to work with districts that have existing contracts that would conflict with the bill.

Because districts have different starting salaries and benefits, the cap would vary by district. And because the bill doesn’t clearly define all the elements that could count as compensation, the impact can only be estimated for now.

Here’s how it would work in Millard — and the arithmetic would be the same across the state.

The salary for a beginning Millard teacher with a bachelor’s degree is $37,765.

On top of that, the district pays for benefits such as health insurance and retirement, and Social Security and Medicare taxes. When those and other factors are included, Millard estimates the teacher’s compensation at $65,151.

Multiply that by five, and the cap on the Millard superintendent would be $325,755.

The current compensation package for Millard Superintendent Jim Sutfin would exceed the limit.

Sutfin’s salary is $230,374, but his total compensation with benefits is $382,286, according to the state disclosure form. Like teachers, total compensation for superintendents includes retirement, health insurance and federal taxes, but superintendents frequently receive other kinds of compensation, such as bonuses, stipends, vehicle allowances, leave days and annuities.

Millard school board President Mike Pate said he’s disappointed that the bill was introduced and doesn’t understand the rationale behind it. He said he’s a firm believer in local control, and he plans to testify against the bill.

“That should be left up to each local school board to determine,” Pate said. “If the public doesn’t like what we’re doing, with regard to that, then we can be elected out of office.”

He said the district has increased expenses only 1.2 percent over the past several years, on average. Last fall voters in Millard OK’d giving the board extra taxing authority for operations.

“We’re managing our resources extremely well in Millard, and we’re not paying our superintendent a huge salary as CEO of a district with 24,000 students and about 2,500 employees — and (we’re) getting good student achievement results, which is really what we’re after,” he said.

The OPS board is in the midst of a search to replace the retiring Mark Evans.

A beginning OPS teacher salary is $41,000, and the total package, according to the district, is $63,559. That would yield a cap of $317,795.

Evans’ salary is $288,359 and his total compensation is $425,914, exceeding the proposed cap by $108,119.

Although Evans will be leaving at the end of this school year — presuming a successor is hired — the limit could impact a deal with his replacement. The board advertised the position as having a salary “in the range of $300,000 plus an excellent comprehensive benefits package.”

OPS received 74 applications for the job, and this week the school board plans to narrow the field to finalists.

Snow said a cap would make it hard for OPS to compete for highly qualified applicants both from inside and outside the district.

He said the elected school board is responsible for hiring a superintendent, managing that person and setting a compensation package that’s best for meeting their needs and for keeping them in the district.

“The main objective should be about achievement,” he said. “And if you have a dynamic leader that can bring achievement up, raise the morale of our teachers, work with our bargaining units and keep the district moving ... I guarantee if you talk to any taxpayer, they will be OK with paying that individual what he or she is worth.”

Lanny Boswell, president of the Lincoln Public Schools board, opposes the bill, calling it an attempt at “a one-size-fits-all solution.”

“I think superintendents are doing great work across the state and that this proposal will have a negative impact on districts, especially those trying to hire a superintendent like OPS is right now,” he said.

Superintendent pay is an issue best left to local boards, who are charged with the responsibility to hire and evaluate them, he said.

“I think districts, when they’re hiring superintendents, they’re operating in a market,” he said. “So you look at Omaha’s search, they’re looking across the entire country to find a quality superintendent. When you’re operating in a market like that, you have to pay what the market is demanding.”

Lincoln’s superintendent, Steve Joel, has a base salary of $317,239. His total compensation — highest in the state — is $484,669, according to the disclosure filing.

District officials estimate beginning LPS teacher compensation under the bill is $66,824.

That would make the LPS cap $334,120.

“Our superintendent, Steve Joel, is probably one of the highest-paid superintendents in the state,” Boswell said. “He’s also, I would argue, one of the best superintendents in the state.”

Boswell noted that details of Joel’s compensation have been available to the public. Posting that information has been a requirement for all districts since 2014, when state lawmakers adopted disclosure requirements to make sure all compensation — including bonuses and benefits above the base salary — is detailed.

“With that information posted up on the website, Lincoln (Public Schools) had four incumbents run for re-election last year,” he said, “and all four are back on the board.”

joe.dejka@owh.com, 402-444-1077