In my last blog I mentioned Assembly Education Committee Chair Joe Cryan’s remark that he considers superintendents’ compensation to be a “gravy train.” What I did not mention was that he also said that he “hopes that this gravy train has hit a brick wall.”
This got me thinking about the real estate market. Ten years ago my wife and I were looking for our first house in the middle of a booming real estate market. It was the kind of market where houses have multiple bids and buyers almost always pay full asking price -if not more. At the moment we were about to give up, we walked into a house that met all our needs. As we looked around, my wife turned to me and said “I want this one!” Even though it was a perfect fit, we were determined to be savvy negotiators and sat with our realtor to discuss our bidding strategy. Then we got a call that there was another offer on the house. Our strategy went ‘bye, bye,” we quickly offered full price and we got the house. In fact, in seeing how much my wife wanted the house, I told our realtor privately that I was willing to go even higher. In today’s stagnant real estate market which favors the buyers, I would not have needed to depart from my negotiating strategy.
I tell this story because the market for superintendents over the last dozen years or so has been like a hot real estate market in which the superintendents are the sellers and boards of education are the buyers who have to pay asking price if they want to clinch the deal.
However, last week, at the Assembly Education Committee meeting, I believe I saw the contract market for superintendents deflate like the real estate market has. It may have actually hit Cryan’s “brick wall.”
Why do I think it may have hit that wall? Because the anger about superintendent contracts I saw from the legislators and from the Department of Education was real. This anger was sparked by the Keansburg superintendent retirement package and followed by news of a similar package for the retiring Hoboken superintendent. The anger has spurred the legislators to action. On June 16, A2975 passed the full Assembly. This bill limits contract clauses like the one that provided the Keansburg superintendent with more than $550,000 (a cash bonus of one month’s salary for each year she had worked in Keansburg). It would even affect current contracts, a provision I suspect may not stand up if challenged in court.
Even if these laws do not get through the entire legislative process, the Executive County Superintendent will be reviewing superintendent contracts very closely. Finally, I believe that boards of education and superintendents who now enter into contract negotiations have a different mindset, much like I would have if I were buying a house in 2008 instead of 1998. Ten years has drastically changed the real estate market; the same thing is happening to superintendent contracts.
The first hint that the superintendent market was going to change was two years ago when a report from the State Commission of Investigation (SCI) publicized superintendent contracts that, although legal, were criticized as excessive. While that report seemed to stir a lot of headlines, it did not cause an immediate change in the negotiations between superintendents and school boards. In hindsight, however, both sides missed the significance of this report. This report was the catalyst for the C.O.R.E. legislation and the Accountability Regulations. The legislators no doubt thought that the SCI report itself would have put the breaks on these offensive superintendent contract clauses.
I want to be clear about one thing: the need for a top-notch superintendent is not going away. When I worked in the field for NJSBA, we often said that the hiring of a superintendent is the most important decision a board member makes. That is because a superintendent is the one staff hire that can make the entire district successful.
So while the need for a great superintendent is as urgent as ever, the compensation and contract process may be very different. As they go into negotiations, boards of education and superintendents will find that their actions will be under more public scrutiny than in the past. That scrutiny will come from both the public and the Executive County Superintendent.
I know that some might quibble with me about the superintendent compensation market crashing. They might argue that in a free market, supply and demand dictates price, and the supply of great superintendents is not limitless. But remember, this is not a completely free market. Superintendent jobs are public positions, and the state Legislature and the administration can change the rules. I suspect that if boards of education and superintendents do not get out in front of this issue the “gravy train” will indeed hit a brick wall. That is because the legislators and governor will build the wall!