More than a quarter of Ohio’s school superintendents are double-dippers, career public employees who collect both a pension check and a paycheck. Stark County has four. Their numbers are rising statewide, aided by rules that encourage early retirements. But school district claims that the practice saves money and that the state has too few qualified superintendent candidates do not appear to be true.
While most people are getting ready for the work day, Larry Morgan already has started his.
By 7:30 a.m., the 68-year-old is working double duty in his roles as superintendent of the Stark County Educational Service Center, which serves the county’s 17 public school districts, and the R.G. Drage Career Technical Center.
Technically, Morgan retired 10 years ago.
But he was rehired into the same job and, today, brings home a salary of $149,689 — $23,504 more than he was making before he retired.
He also receives a pension, along with his regular paycheck. And Morgan’s retirement continues to grow because he is still working. Contributions to the State Teachers Retirement System of Ohio are being made on his behalf by the local school boards that employ him. Morgan also gets $10,000 annually toward a tax-deferred annuity.
Plus, when he stops working for good, Morgan will receive at least $75,000 for serving as R.G. Drage’s superintendent.
Morgan is what is commonly called a double-dipper, collecting both a pension check and a paycheck. Neither he nor the boards that employ him are breaking any laws.
But, according to an analysis by Ohio’s eight largest newspapers, double dipping is becoming increasingly common, especially among superintendents.
The newspapers’ analysis found:
One in four public school leaders in Ohio’s 614 districts bring home the bacon twice, and one in two educational service center superintendents are doing the same.
Allowing superintendents to retire early halts their contributions into the fund and pulls millions of dollars out at a time when the fund’s long-term viability is at risk.
Superintendents point out that the practice is legal and that it would be foolhardy not to take advantage of a pension system that permits them to retire and return to work.
While many superintendents claim this practice is justified because of a shortage of qualified candidates, the Ohio Department of Education says thousands of licensed individuals meet state standards to run school districts.
This is part of a larger state issue. About 32,000 state and local employees collected more than $1 billion in pension payouts last year on top of their paychecks. Three-fourths of those dollars went to STRS members.
More than 150 (about 27 percent) of the state’s 613 superintendents are collecting paychecks and pensions at the same time. The ratios are higher among heads of the educational service centers, the former county school districts merged in 1995 to create 56 support centers for local school districts.
For the past decade, a growing number of school chiefs have cut deals to retire, started collecting a lucrative public pension and have returned to work, often in the same job. These superintendents increase their earnings in a single weekend, often by as much as 80 percent.
Page 2 of 5 -
RETIRE/REHIRE SAVES MONEY?
In many communities, school board members have told residents that hiring a retiring superintendent saves money.
In the Gahanna-Jefferson Local School District, just northeast of Columbus, the school board touted the savings in rehiring Superintendent Gregg E. Morris because his health insurance would be picked up by STRS.
In 2009, STRS acknowledged that paying health care for double-dippers was too expensive and it ended the practice, so Gahanna again began paying for Morris’ health care.
Morris left Gahanna this year to become superintendent at Clark-Shawnee. He replaces Debbie Finkes, who was paid $95,188 a year. Morris signed a three-year contract paying him $110,000 annually.
Luci Gernot, superintendent of the Wood County Educational Service Center south of Toledo, retired after 28 years in 2007 from another school district. That provided her with about $56,000 a year in pension benefits.
She is paid $115,000 in her ESC job.
Gernot said she could have obtained another job in any number of industries but decided to stay in education. Either way, she said, she’s entitled to the pension benefit.
“It’s something I’ve earned,” she said.
The deals between superintendents and their school boards have left some residents feeling betrayed.
In Cuyahoga County, William Zelei retired in 2005 as superintendent at South Euclid-Lyndhurst City Schools at age 56 with 23 years in public service.
He was making about $140,000 annually and came back to the same job with an agreement to be paid $30,000 less a year.
After a levy passed in November 2008, the board agreed to extend Zelei’s contract in February 2009, and residents believed he would receive no pay raise. After teacher contracts were settled with minimal raises, the Euclid school voted 3-2 that August to raise Zelei’s salary 24 percent, or about $32,000.
Residents packed the board meeting to protest the move that would pay Zelei $164,077 by the 2011-12 school year.
Suddenly, he was the second-highest paid superintendent in the area and in his fourth year of collecting a pension at age 60.
HIGHER PAY, NICE PERKS
It is difficult to put a price tag on the impact of these deals, but Ohio has been criticized for how much it spends on school administration.
A February study by the Brookings/Greater Ohio Policy Study Center found that Ohio ranks ninth among states in tax dollars spent on administration, but ranks 47th for putting money into classrooms.
Brookings also reported that Ohio’s share of spending on administration was 49 percent higher than the national average.
STRS has more working retirees than any of the five Ohio pension systems and paid out $741 million in 2009 to 15,857 retirees. The average benefit: $46,800.
Page 3 of 5 - Before the 2000 law change, teachers had to wait 18 months to return to public service. The forfeiture period was reduced to two months, in line with other public employees.
Since then, STRS has seen enormous growth in the number of double-dippers as teachers return to work on a full- and part-time basis and as adjunct professors at universities.
In 2009, approximately 1,100 STRS members received on average $67,000 in pension pay while returning to work and earning $70,000 to $100,000 in a post-retirement job at a school district.
An even more exclusive group of 299 STRS retirees received pension checks of more than $80,000 on average while earning six-figure salaries annually from a job. Their number has grown from just 19 in 2000.
The Ohio newspaper analysis of double-dipping superintendents showed that, among those checked, most make more in salary than they did prior to retiring. They also sign contracts with perks that make them consistently among the highest-paid public sector jobs in the state.
For example, many districts not only give the superintendent a pay raise, but they also pay both sides of the employer/employee contribution into the retiree’s annuity to STRS. This, in effect, is a 10 percent pay increase on top of the base salary.
Districts often pay the 1.45 percent of salary to Medicare as well as a car allowance, training and travel money, overtime for working holidays and any days not stipulated in the contract, and insurance.
Why do they command these generous offers?
Forest Yocum retired in 2002 at age 56 from Pickerington City School District before being hired at $132,000 as superintendent at Southwest Licking east of Columbus.
“The problem facing a school board is the number of people available,” Yocum said. “There are not that many top-quality candidates.”
Yocum and other superintendents said there is a limited pool of qualified applicants trained, experienced and prepared to assume the demanding role of running a district.
But the Ohio newspaper analysis found there are thousands of licensed Ohioans available for superintendent jobs. There also are potential out-of-state candidates and others currently working in education who could be groomed. Scott Blake, an Ohio Department of Education spokesman, said 3,305 Ohioans are credentialed to be superintendents. An additional 1,204 are inactive.
Ten years ago, Mark Freeman retired as superintendent at Shaker Heights near Cleveland. It would seem that a large number of applicants would seek a chance to run one of Ohio’s most prestigious and envied public school districts.
Freeman was earning $149,675 annually when he retired with a pension that was nearly 88.5 percent of his income.
Shaker Heights rehired Freeman without publicizing the opening or interviewing another candidate. He received a pay raise in his first day back on the job — to $156,546 — to go along with the money from his public pension.
Page 4 of 5 - Deals like this led lawmakers in 2003 to require school boards to conduct a job search before rehiring recently retired superintendents.
Now, a district must post the opening 60 days in advance, hold a public hearing on rehiring the existing superintendent to determine whether there is any opposition in the community, then vote publicly to rehire.
These rules have not stopped a small cadre of superintendents from continuing to monopolize the positions.
Jennifer Sinisgalli, Strongsville Schools Board of Education president, said her district received applications from 25 or more individuals when the superintendent’s job was open in 2009. The district retained Jeffery Lampert, who had taken the job on an interim basis in December 2008.
Lampert retired eight years earlier from North Royalton and already was collecting a pension. He worked as an adjunct professor at Baldwin-Wallace College before returning as a superintendent to Brooklyn City Schools in 2005. He left the business again. Then Strongsville came calling in late 2008.
Sinisgalli said Strongsville did a full job search with applicants from Georgia, Florida and other states, interviewed five or six candidates and ultimately decided to continue with Lampert.
She said complaints about a weak applicant pool were unfounded.
“I was quite surprised because I heard the same thing, that districts would have trouble finding qualified candidates. We had heard it, but we were thrilled with the response we had,” Sinisgalli said.
Gary Burtless, a senior fellow at the Brookings Institute, has studied pension funds for 30 years.
He said that there is nothing wrong with a school district rehiring a retired superintendent, but that a system should be in place to reassure the public a thorough search was conducted to find the best candidate.
There are no statistics to explain how many qualified employees cannot ascend to a superintendent’s job because a double-dipper is occupying the office. But the clog factor exists at a time when school districts are laying off teachers and Ohio’s unemployment rate hovers around 11 percent.
Barbara Bradley retired as an assistant superintendent from West Muskingum in 2006. Six months later, she was hired as superintendent in Batavia in Clermont County, giving her more than three years of pay and retirement income before she leaves the job this summer.
She was licensed for the West Muskingum job, but there was no room to move up because her boss, who was collecting a pension, had received a new five-year contract.
Bradley said that it’s the nature of the game to move if one wants to be a superintendent, but that there are numerous opportunities each year.
In 2009, Massillon City Schools adopted a policy that basically told administrators, not counting the double-dipping superintendent, that they could come back to work after retiring, but at 75 percent of their base salary.
Page 5 of 5 - In the Milford School District in Clermont County, Robert Farrell made $110,000 this year after retiring in 2007 when he was 53.
Farrell also receives a $6,000 annual car allowance and a $20,000 annuity paid by the districts.
Teachers wishing to return to work at Milford do not fare as well. They are hired on a year-to-year basis, cannot re-establish their tenure and must accept the equivalent salary of a fifth-year teacher, according to the school treasurer, Randy Seymour (a double-dipper).
This is not unusual. The Ohio newspaper analysis found numerous examples of double-dipping superintendents presiding over contracts with teachers that provided far fewer benefits to classroom instructors.
Several legislative efforts have tried to address this issue in the past decade.
In 2007, former state Rep. Michelle Schneider, R-Madeira, proposed a six-month waiting period, effectively banning the practice of weekend retire-rehire for all the state pension funds.
That same year, state Rep. Bruce Goodwin, R-Defiance, introduced legislation to require double-dippers to take a 40 percent pay cut before returning to work. The proposal was aimed at school superintendents and top governmental administrators.
In both bills, the Legislative Service Commission, which provides fiscal and legal analysis to lawmakers, noted their numbers crunchers could not determine whether double dipping cost taxpayers money, but they concluded that delaying retirement reduced STRS liabilities.
That’s because STRS members who work beyond 35 years continue to contribute into the fund.
On the other hand, superintendents who retire at 30 or 35 years halt their contributions into the general pension fund while possibly drawing more than $1 million before reaching age 65.
This runs counter to pension logic, which provides participants with higher income if they work longer — as does the Social Security System.