School administrators, thanks to high salaries in the final years of their careers, place heavy stress on educator pension programs. That’s bad news for Wisconsin, where a large number of small districts means that administrators are in no short supply.
A recent study by Dr. Michael Podgursky, Shawn Ni, and Cory Koedel shows that educational administrators bear the heaviest costs when it comes to pay for post employment benefits. These officials often have higher salaries upon retirement, something that factors strongly into a pension program that determines payout based on an employee’s salary over last three years of his or her career. Thus, higher incomes mean higher pensions, and that takes educational funds out of the classroom and puts them into retirement systems instead.
What’s notable is that this program differs from retirement systems in large, private sector corporations and firms, where executives are often separated from employees. Without that separation, pension programs benefit administrators – who are often former educators themselves – much more than teachers. This leads to a much greater accrual of pension wealth for these higher-level staff members.
That’s an obvious point, but why does it concern Wisconsin? Because the state’s relatively small district size has created a significant network of administrative staff, who weigh down post-employment benefit costs. In all, the state employed 3,539.7 full time administrators. That’s a ratio of 18.5 teachers for every administrator in the state.
Wisconsin has 424 districts for its 872,436 students. That means that these districts all have their own sets of administrative staff who are earning larger returns from their employee retirement programs as their salaries increase. At 2,057 students per district, the Badger State’s small district size lags far behind other states like Florida. There, 74 districts educate 2,634,522 students – an average of 35,602 pupils in each area.
There were 8,545 educational administrators in Florida for the 2011-2012 school year. There were also approximately 171,833 teachers employed in K-12 classrooms as well. That creates a ratio of 20.1 teachers per administrator in the Sunshine State. Even though Florida has fewer districts, the state’s instructional to administration staff ratio is only 8.6 percent higher. If that ratio were applied to Wisconsin, the state would employ around 275 fewer administrators than it did in 2013.
Small districts mean a glut of administrative costs – the expense of keeping smaller towns autonomous and local athletic rivalries intact. In the future, Wisconsin educators may have to balance the two ideals – administrative savings and small organizational sizes – against each other. According to Podgursky and company, reducing the amount of administrators that are collecting post-employment benefits could be a key factor in directing money back into the classroom – where it’s needed the most.