Capped Out: How Salary Ceilings Impact Education

Christie’s ceiling on superintendent salaries pushes some administrators across state borders.

Roy Montesano, named the New Jersey Association of School Administrators’ superintendent of the year, left his position in Ramsey after seven years to lead a school district in New York. He says New Jersey’s cap on superintendent salaries motivated him to make the move.
Photo by Colin Archer/Agency New Jersey.

Roy Montesano started his career in education 32 years ago, when he took a job as a science teacher at George Washington Middle School in Ridgewood. He moved through the ranks in Bergen County schools, his title changing to assistant principal, principal, assistant superintendent and finally, superintendent. For the past seven years, Montesano, who comes from a family of superintendents, led Ramsey’s public schools. “It’s a wonderful job,” he says. He’s been praised for building a district that prepares kids for the technological challenges of the real world.

For his accomplishments, the New Jersey Association of School Administrators named Montesano superintendent of the year for 2012, an honor recognized by the state Senate in December 2011. Nonetheless, just one month later, he announced plans to leave Ramsey for a new job in New York state. The reason, he says, is New Jersey’s newly imposed cap on superintendent salaries.

Governor Chris Christie and former education commissioner Bret Schundler proposed the cap in July 2010 as part of the governor’s reform agenda addressing New Jersey’s property tax crisis. Christie’s 33-bill package put a 2.5 percent cap on annual increases to property tax levies (it had been 4 percent), which help fund public schools. His tool kit for schools, as he called it, included not only the superintendent salary cap but also pension benefit reform, which escalated tensions between the governor and teachers’ unions already stung by significant cuts in state aid that threatened teachers’ jobs.

The superintendent salary cap was introduced as a way to eventually save public schools a projected $9.8 million statewide by cutting superintendent salaries. (It will be up to each district to decide how the money will be redirected.) The cap, which became effective in February 2011, ties salaries to the number of students a district serves, so the more students, the more pay the superintendent may earn.

The adjustments—and the savings—will occur as superintendent contracts expire and new ones are drafted under the cap. More than half of superintendents who stay will have their salaries reduced by at least a few thousand dollars, even if their duties remain the same; some salaries could drop more than $100,000 a year.

“It’s very defeating,” says Montesano, who had roughly three years left on his contract with Ramsey when he accepted his new position as superintendent for Hastings-on-Hudson, a public school district across the Hudson River in Westchester County. The new job will pay him $230,000, representing an increase of about $10,000 above his New Jersey salary. If Montesano had stayed, his base pay in a new contract would have been cut to about $165,000. Still, he says, his decision was not all about money; it was also about maintaining the integrity of the position.

Before the cap, the top salary for a superintendent in New Jersey was about $280,000. Under the cap, maximum salaries range from $125,000 in districts with up to 250 students, to $175,000 in districts with up to 10,000 students. Superintendents in New Jersey’s 16 districts with more than 10,000 pupils may be paid more with commissioner approval, and administrators who elect to oversee an additional district may earn a stipend of up to $10,000. New regulations also allow for as many as five non-pensionable, merit-based bonuses that can be as much as 3.33 percent of a superintendent’s salary.

“For a comparable job in the private sector, these salaries would be minuscule,” says Richard Bozza, executive director of the New Jersey Association of School Administrators, an organization backing several superintendents in lawsuits challenging the state’s authority to enforce the cap. Previously, guidelines from the education commissioner stipulated that superintendent contracts—which typically are renegotiated every three to five years because the position is nontenured—should be based on contracts in comparable districts. “We did have a standard,” says Bozza, “and we didn’t have people saying, ‘Fine, then I will leave the state.’”

But like Montesano, more than 20 other veteran superintendents have left New Jersey because of the cap and have taken jobs in other states. Among those are Frank Alvarez (who left Montclair for Rye, New York); Thomas Morton (Sparta for New City, New York); Edward Kliszus  (Hackensack for Port Chester, New York); Raymond Bandlow (Fort Lee for Beacon, New York); and Montesano’s brother James (Paramus for Nyack, New York). More are expected to follow, and experts say the migration will increasingly affect schools in the years to come.

“We have yet to see the full impact,” says Michael Osnato, director of the Institute of Education Leadership, Research and Renewal at Seton Hall University and a former superintendent. “Certainly, [schools] will suffer from a lack of experienced, talented superintendents staying in jobs,” he says. While some administrators choose to leave the state, says Osnato, many others may choose early retirement. Younger superintendents with long careers ahead of them are also aware there will be a limit to their raises in New Jersey, says Osnato, and will eventually look elsewhere for jobs.

“There are a lot more [superintendents] looking to get out who haven’t gone because it is not that easy to get a job,” says Osnato. Jobs in neighboring states, he says, have become a lot more competitive, as have jobs in larger districts, where there is greater pay potential. Osnato predicts that northern New Jersey, where superintendent salaries were once the highest in the state, will be the hardest hit. Administrators there can more easily commute to New York state, where salaries sometimes exceed $300,000. (However, implementation of the cap in New Jersey was followed by New York governor Andrew Cuomo’s proposal for an identical cap in his state.)

Hiring a superintendent is a school board’s most important function, says Osnato, since the district leader sets the tone for the entire school system as well as the municipality. “They are very important to everything from real estate prices to people’s pride in the community that they live in,” Osnato says. School boards typically look for candidates with both teaching and administrative experience.

“You have to be an expert in education and able to handle all these others things like finance, professional development, transportation, feeding the kids,” says Bozza. But for many districts seeking a new superintendent under the cap, the applicant pool has changed.

Since the cap, candidates for superintendent positions have gotten younger. “There is a dearth of experienced people,” says Osnato, who also heads a superintendent search firm. Five years ago, the average age of a starting superintendent was 53, but now, many applicants are in their 30s and 40s, looking to move up from principal positions.

“There are some good candidates out there,” Osnato says, “but you have to really recruit.” That’s because some educators have become more apprehensive about leaving tenured positions that are protected from salary reductions.

There have also been fewer applicants for smaller districts with less pay potential. “The demands of the job, coupled with the salary cap, impacted the number of candidates,” Osnato says. In places where school boards might have received 30 to 50 applications just a few years ago, he says, they have gotten only a handful. (As the 2011-2012 school year came to a close, there were 60 to 70 superintendent vacancies in public school systems across the state, including Glen Rock, Englewood Cliffs, East Brunswick and Mahwah.)

There are exceptions. In Cherry Hill,  one of the largest districts, school board president Seth Klukoff says his team had no trouble finding a replacement last year for retiring superintendent David Campbell. Out of 31 applicants, 19 met all the criteria, and in a few months, board members found someone worth hiring. “We were probably an anomaly to other districts,” says Klukoff, who attributed the successful search to Cherry Hill’s good reputation.

Observers agree the cap was created in response to public outrage after a few administrators accumulated hundreds of thousands of dollars in buyouts and other compensation. “When you get abuses, whether it’s in accumulated sick leave or extraordinary benefits, in the public sector, it produces a reaction,” says Osnato, “and the reaction was the cap.” (In May, the New Jersey Supreme Court ruled that the state could enforce a $15,000 cap—unrelated to the salary cap—on the amount retiring school administrators can be compensated for accumulated unused sick time.)

In addressing perceived abuses, the salary cap has created the possibility for an imbalance among the education leadership. While the cap applies to superintendents, it does not apply to other administrators. “There’s nothing stopping anyone else in the school district from having a raise,” says Bozza. In the future, some principals and assistant superintendents may make more than their bosses. “I think it produced a dynamic of tension in the organization,” says Osnato. The cap also does not apply to directors of charter schools, which also receive public funding.

Some educators and school board members say they were not sufficiently consulted about the cap before it was put in place. Christie did host a series of meetings to discuss the measure. “But it didn’t matter what you said,” says Bozza, who has spoken publically about the issue several times. “The governor announced well before any public hearing that this was going to happen.”

The Christie administration claims there is no proven link between high salaries for superintendents and high test scores for students. The administration also says there is no shortage of qualified candidates for superintendent positions. “Districts have been able to attract extremely talented individuals to serve as their superintendents since the cap took effect,” says Department of Education spokesperson Barbara Morgan, “and we firmly believe this will continue to be the case.”

While some in education have opposed the cap, 68 percent of voters support it as a way to save money in schools, according to a Quinnipiac University poll released around the time the cap took effect. Only 25 percent of voters said the cap interferes with local government. The cap is set to expire in November 2016, but there is no guarantee it won’t be replaced by another. “Those regulations can be implemented anew,” says Bozza. “At some point, the lack of sustainability will be obvious to people.”

Montesano, whose four kids went through the public school system, says he worries about the consequences of the cap, and about educators taking on leadership roles before they are ready. “There is a learning curve,” he says, “and there’s going to be a gap until [schools] get where they’ve been with experienced superintendents.” Like his father and two other brothers before him (all retired superintendents), Montesano thought he would spend the rest of his working years as a superintendent in New Jersey.

But now he is eager to start a new chapter. “With change is opportunity,” Montesano says, “and I am looking forward to a new place, a new state even.”

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