Friday, July 16, 2010

Governor Christie in Action, Saving Money

In New Jersey, every district has its own ____, fill in the blank. Fire department, police force, public works, school system, blah, blah. While this may seem redundant and unnecessarily costly, that's the Jersey way. To illustrate, on Absecon Island, a 9.4 x 0.8 mile barrier island, there are four towns. The largest is Atlantic City (approx, population 40,000), Ventnor City (13,000), Margate City (8,500) and Longport (1,100). Roughly, the total population is 62,600. The island houses 4 police departments with chiefs, 4 fire departments with chiefs, 4 mayors with city officials, and 3 school systems with 3 superintendents.

In exploring the silliness of the Jersey home/local/district rule construct, the school superintendent position has gained some recent attention. Governor Chris Christie has just proposed putting a cap on the salaries of New Jersey's 523 superintendents. He has forwarded a formula based on district enrollment. Bonuses are offered based on reaching certain carrot on the stick goals. Mr. Christie and his numberkind have set forth different sets of regulations for the superintendents based on student enrollments.

About 70% of the superintendents are presently overpaid by the Governor's plan. To put it another way, 366 of the current superintendents will receive pay cuts if the caps are put into place. The salary reductions would go into effect at the time of the superintendent's contract renewal date. Right now, the average salary for superintendents in districts with fewer that 1,000 students is $152,764, while it's $192,764 when the student enrollment exceeds 1,000. Mr. Christie thinks the annual savings would approximate $10 million. Indeed!

It goes without saying that the superintendents don't think this is a good idea. It is asserted that superintendent retirements would ensue. Further, due to the salary embarassments, it is suggested by Richard Borza, director of the New Jersey Association of School Administrators, others applicants would be discouraged from applying to be a superintendent. Under Mr. Christie's plan, maximum salaries for small districts (under 1,000 students) would be $120,000 per annum and $175,000 for districts with enrollments between 1,000 and 10,000 students. Considering all of these jobs come with generous benefits, bonus and retirement packages, Mr. Borza may be wrong. Common sense dictates lots of educators would love a New Jersey superintendent job, even at the Governor's reduced pay scale.

Returning to Absecon Island, the superintendents of Atlantic City, Ventnor City and Margate City earn an annual salary of $196,003, $133,558 and $133,875 respectively. All three may be in line for salary cuts under the Christie plan. Their respective student enrollments are 7,106, 954 and 576. Another way of looking at this is to realize that the superintendent costs on Absecon Island, for 8,686 students, is $463,433. And that's without the three benefits packages factored into the financial impact of this system. In comparison, the southern New Jersey City of Vineland has 9,675 students enrolled with a superintendent cost of $170,800. An average taxpaying New Jerseyean might question the imbalance between superintendent costs on Absecon Island and in Vineland.

A first year business student, presented with the task of saving money in the educational system of New Jersey, would go Mr. Christie one better. The learner would not only restructure superintendent salaries, but he would substantially reduce the bloated number of superintendents. The simple economic principle of economy of scale would be implemented. Home rule, local rule, district rule and any other rule you can think of, make the state of New Jersey slow, inefficient and wasteful. It is no wonder it costs so much to live in the Garden State.

Once the Governor has fixed the superintendent conundrum, maybe he can check out the police departments. Does the state really need so many fragmented departments? So Many chiefs? Does Medford Lakes really need its own force when Medford is next door? How about Princeton Township and Princeton Borough? And Lumberton and Mount Holly? And so on and so on.

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