Top 100 IL School Salaries will pull down $1 billion in pension payments.

Once again when we compare compensation of IL K-12 educators with other states we find an enormous gap.  Just looking at IL vs. WI we see a $164,000 premium for IL top administrator salary compared to WI.

And in this particular case, the $368,000 is more like $400,000 for IL top administrator Harry Griffith from Lake Forest.  He also has a $75,000 loan completely forgiven, a $1 million life insurance policy, free health insurance until he is 65 and a $25,000/yr. annuity among other goodies. This puts his total compensation, not including district provided health insurance, well over $400,000. See Nancy Thorner’s excellent analysis of Griffith’s contract here.

Why does IL have to pay so much more for school administrator salaries and pensions than Wisconsin?

 Griffithmay be the poster boy for overpaid school employees but he is certainly not alone.  Here’s a list of the Top 100 Administrators salaries for 2011.  Note that every one of the Top 100 has a salary greater than the top WI salary of $198,000. For the top 100 there is an average $107,000 difference in salary per person when comparing IL to WI.

Look here to see what $1 billion in pension payments looks like:

Top 100 Admin Salaries and Pensions

And if we compare the Top 10 salaries IL vs. WI here is what it looks like:

Top Administrator Salaries 2011 IL vs. WI
Illinois

SALARY

Wisconsin

SALARY

Difference
Griffith

$362,338

Nerad

$198,500

$163,838

Dada

$358,751

Maass

$184,000

$174,751

Fleming

$353,390

Shaw

$180,000

$173,390

Lamberson

$327,627

Andrekopoulos

$175,062

$152,565

Giannetti

$325,919

Rickabaugh

$170,850

$155,069

Schoffstall

$317,970

Kreutzer

$166,089

$151,881

May

$309,434

Westerhaus

$165,626

$143,808

Lane

$299,608

Petric

$164,779

$134,829

Gatta

$299,597

Hughes

$163,256

$136,341

Carmine

$298,205

Heilmann

$162,000

$136,205

SOURCE: IL State Board of Education, Wisconsin Department of Instruction

The top WI salary, $198,000, was for a school district with 40,000 students compared toGriffiths4,000 students. SoWisconsintaxpayers get schools with 10 times as many students supervised for $164,000/yr. less. Why don’t we just recruit superintendents from WI?

Wisconsin pension payouts for top 100 are $600 million less than IL.

Because WI educators do not receive maximum pensions until age 65 compared to IL age 54, and their COLA (Cost of living adjustment) is variable and averages about 1.5% compared to IL 3%, and WI top rate is 70% of salary compared to IL 75%and their salaries are much lower, the pension cost savings just for the top 100 administrators would be more than $600 million over their expected lifetimes (IL = $923 million vs. WI = $316 million). And that number includes Social Security for WI employees.

Here is a comparison of pension payout for just the Top 10 administrators in IL and WI assuming retirement at age 55 and age 65 respectively:

Lifetime Pension Payouts IL vs. WI
Illinois Lifetime Pension Payout Wisconsin Lifetime Pension Payout Difference
Griffith   12,772,415 Nerad     4,090,800     8,681,615
Dada   12,645,957 Maass     3,847,200     8,798,757
Fleming   12,456,998 Shaw     3,780,000     8,676,998
Lamberson   11,548,864 Andrekopoulos     3,697,042     7,851,823
Giannetti   11,488,654 Rickabaugh     3,626,280     7,862,374
Schoffstall   11,208,456 Kreutzer     3,546,295     7,662,161
May 10,907,549 Westerhaus 3,538,517 7,369,032
Lane   10,561,166 Petric     3,524,287     7,036,879
Gatta   10,560,809 Hughes     3,498,701     7,062,108
Carmine   10,511,726 Heilmann     3,477,600     7,034,126

Isn’t a billion dollars too much pension payout for just 100 school employees?

OK I exaggerated a little: the estimate for the top 100 administrators actually comes out $923 million but since the top 100 only average 29 years of work most of them still have years (and many raises) to go before they retire so in actuality this number is probably low. An example of that is NanciannGatta, superintendent of Niles HSD 119 who at age 40 is making $300,000. If she averages only a modest 5%/yr. increase over each of the next 15 years, until reaching retirement age at 55, her ending salary would be $623,000/yr and her total pension payout over her expected lifetime would be over $20 million.

Union members and some politicians will tell you these are “guaranteed” and “promised” and too bad if it’s a billion dollars. Hopefully they won’t try to tell us these are “modest” pensions.

Pension reform must deal with these huge future pension payments pouring out of the current public employee universe. At a minimum make pensions taxable and eliminate the COLA (Cost OF Living Adjustment). Taxing all pensions until pension funding reaches 90% would raise $350 million this year alone.

Removing the COLA until pension funding reaches 90% will save $210 million this year and $140 billion over the next 35 years. Because of compounding the 3% automatic COLA doubles pensions every 24 years and eliminating it saves roughly 1/3 of all future pension payments over the next 35 years.

Gov. Quinn really, really wants pension reform. Here is a couple ideas to start with. Add in Tom Cross’s new pension reform bill and we have a way forward.

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