SB 766-A Engenders Mixed Feelings

Trey Smith

State Senator Vicki Walker (D-Eugene) is sponsoring SB 766-A which would impose a cap on the amount of compensation for departing school administrators. Anyone who reads my blog regularly (or even semi-regularly), would figure I would be a strong supporter of this bill. If you figured that, you'd be right and, surprisingly, a bit wrong.

On the plus side, I don't believe school and educational service districts should be lavishing outgoing administrators with taxpayer-funded nest eggs. I have no problem whatsoever with the provision of retirement benefits, if the individual has served long enough to qualify. But, in this day and age of constrained educational budgets, it's crazy to spend oodles of "special" money on people no longer employed while teacher pay is frozen and various programs are being removed or slashed.

That said, this bill seems out-of-step with the way business is run in this global capital world. We've all read various headlines which tell stories of big CEOs -- some who have run their corporation into the ground -- who are lavished with mind-boggling severance packages, millions of dollars worth of stocks and stock options, luxury cars and a host of other egregious benefits.

Since public servants generally receive less compensation than they would in the private sector, it seems like a double whammy concurrently to limit what they can receive as they head out the door. If their private sector counterparts can reap a windfall of extravagance upon leaving a company, why shouldn't school administrators expect the same?

One obvious answer is that the latter are to be paid with PUBLIC monies, while the former are not. In a way, I feel this is mere quibbling over semantics. Most all of the money that flows into private sector coffers comes from the public too, both through the sale of products and/or services AND, far too often, in the form of government payments, tax breaks or subsidies. In other words, the money comes from us average folk, one way or the other.

Consequently, I think I'd be a more vocal supporter of SB 766-A IF it applied across the board. The way it is now written seems to penalize one very small segment of our society.

  • LT (unverified)

    Those of us in Marion County are glad someone is at least making a stab at administrator accountability. Previously it had been a GOP mainstay that unions must be micromanaged and administrators (also paid with tax dollars) could be paid "whatever the market will bear".

    And there is another issue. COSA and OSBA opposed 766. Was it because there is more prestige in recruiting administrators from out of state? If so, they should say so--and explain why that shouldn't be a matter for public debate.

    Kay Baker, Salem Supt. is a poster child for this. She's the one paid a bonus by a board so out of tune with the voters that none of them is running for re-election (to be fair, one is retiring for health reasons and the one member who did stand up to the others probably decided he could live without the stress) that she ended up donating it to a literacy program. She and the board kept district reserves secret while telling parents there was no money for elementary music--2 years later, some are still fuming.

    Is SB 766 perfect? No. Is it a step in the right direction? Yes. The fact that Gary George voted yes: Ayes, 19; Nays, 8-- Atkinson, Ferrioli, Kruse, Morse, Nelson, Starr, B., Starr, C., Westlund; Excused, 1--Shields; Attending Legislative Business, 2--Prozanski, Winters. should say something about the bipartisan nature of the bill.

    Hopefully we have heard the last of micromanaging teachers and other unionized personnel but saying "Sorry, we can't regulate anything about administrators--local control don'tcha know".

    If the legislature and the public can discuss how other tax money is spent, why can't they discuss administrative pay packages? Because some lobbyists don't want them to?

  • (Show?)

    Sometimes the administrator parachutes are the only chip school boards have in quietly letting a superintendent go.

    Vikie Philips is a great example of an out of state administrator who understands efficency and fiscal responsibility.

    As for Salem, the secretative top administrators are the home grown types whom Kay trusts....

  • David Wright (unverified)
    "If their private sector counterparts can reap a windfall of extravagance upon leaving a company, why shouldn't school administrators expect the same?"

    Who are the "counterparts" here? They aren't Fortune 500 CEOs. Are private school administrators getting millions in stock options and other compensation, luxury cars, use of private jets, etc.?

    But apart from that minor point, the fact is that corporate CEOs get these sweetheart deals typically because they negotiated with the board of directors (or representatives thereof) to get those deals. And the board made a decision regarding how appropriate such a deal was, on behalf of the shareholders in the company.

    If the shareholders of a given company chose to resolve to limit the compensation deals for outgoing CEOs, they would be free to do so.

    In this case, we the people are effectively the shareholders in the public school system. And we as shareholders should be free to set boundaries as to what we consider "appropriate" compensation levels for administrators. If we as shareholders make the wrong decision, such that it limits our ability to attract management talent, then we the shareholders will ultimately pay the price of a worse education system (and can then adjust the rules again as appropriate).

    It all seems perfectly compatible with Republican ideals to me... <nobr>  ;-)</nobr>

  • Yoram (unverified)

    "The fact that Gary George voted yes... should say something about the bipartisan nature of the bill. "

    What, you've got the support of both parties, Democrats and Whacky Aliens?

    The support of Gary George (R-Outer Space) is no indication of anything...

  • ron ledbury (unverified)


    What planet are you from?

    Suppose I write the latest and greatest software since sliced bread. I have but one employee, myself. And I make the proverbial killing. Under the concept of consumer sovereignty I get piles upon piles of money through my own ingenuity. If you think that the state should be, shall I say . . . fair, by denying me the benefit of the consumer's free choice then what incentive shall I or anyone else out there have to one-up their peers or competitors.

    The beneficiary is the public, for offering me an incentive.

    The labor statistics, by the way, show a much higher wage for public sector workers than for private sector workers. And nowhere do the statistics reveal the great individual losses of aspiring entrepreneurs that fall on their tail for each of those few that actually meet a consumer need rather merely attempt to meet a consumer need.

    I would certainly not look at the existence of CEO pay as an excuse to disregard placing a limit on pay for so-called public service.

    If your beef is CEO pay then you should join me in demanding an end to the tax incentives offered to people only if they voluntarily delegate their investment choices to the professional money managers that tolerate the high CEO pay without batting an eye. Take away their access to less-than-market-cost investment capital via the deceptive device of calling most savings as retirement accounts of one sort or another. Bush's latest SS proposal is like a penalty for placing savings in anything other than a delegated investment vehicle. Imagine that tax deferred retirement accounts could only be invested in sole proprietorships and small Subchapter S corporations and the like . . . and were prohibited from being invested in the publicly traded companies with a market cap of at least 25 million? (The retirement accounts exist to get around the banking laws the emerged after 1929 that prohibited demand deposits from being invested into stock market equities. If you want to piss off overpaid CEO's then take away their special access to investment capital at preferential tax rates to that available for mom and pop entrepreneurs.) The pay level for politically connected public administrators is wholly and completely irrelevant to the issue of CEO pay.

  • Trey (unverified)

    To all people posting comments past and future: I realize the internet isn't always the best medium for writing sarcastically or tongue-in-cheek. Just so you know, my chosen heading and the subsequent essay were written "tongue in cheek".

    In a manner of speaking, I was trying to view this issue coming from a perspective that is the opposite of my own. [Note: In Grad School, I had to write a paper IN FAVOR of anarchy and wanton violence -- I'm a lifelong pacifiist -- I got an A.]

  • Kent (unverified)

    Sometimes the administrator parachutes are the only chip school boards have in quietly letting a superintendent go.

    Huh? And why is it a good thing that the current system allows a board to "quietly let a superintendent go" If they need to be let go, who cares if it is quiet or noisy? I assume school boards have decent enough attorneys to make sure their contracts allow them to get rid of poorly performing administators.

    I have three commments about this piece of legislation:

    First, I see no reason why it needs to be limited to school administrators. If it is a good idea, why not apply it across the board to all publically funded administrative positions? I recall a controversy some years ago about the director of the Port of Portland and excessive golden parachutes. And, of course the state universities like to lavish big contracts on coaches. I'm sure there are other examples.

    Second, the bill doesn't appear to limit compensation for WORK, just for leaving. So school boards will still be able to pay market rates to attract good help. What they won't be able to do is play the "hide the sausage" game in which the publically disclosed pay of some administrator is padded with all sorts of hidden perks so that the public doesn't really know what they are actually making.

    Third, I believe there is plenty of local talent working in education. If school boards have to skip the expensive executive search nonsense and start looking inwards they'll probably find a lot of talented administrators already working in their own schools who have long-term roots and are dedicated to the community. Perhaps local school boards should be looking for ways to groom local principals and other administrators for some of these jobs rather than look for out-of-state talent to drop in touch-and-go style for a quick fix.

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