A Silver Lining

Along with dropping temperatures, fall brings newspaper stories about shortages of school supplies and teachers paying for classroom supplies out of their own pockets.

But this fall the headlines also brought a different kind of story.

Not long ago the State Treasurer sent bills to four counties claiming they owed the State Pension Fund money for ‘pension spiking.’ Johnston County – which received an invoice from the Treasurer for $435,000 – is an example.

Here’s what happened: When state employees retire their pensions are based on their salaries. Just before Johnston County’s school superintendent retired the local school board increased his salary by a whopping $130,000. How the Board did that was interesting: It converted $44,000 in fringe benefits to salary, made $50,000 in special payments to the Superintendent, and paid the Superintendent $36,000 for unused vacation and bonus days.

Then the Superintendent retired at age 50 with a state pension of $143,436 a year.

The State Treasurer decided the Superintendent’s $130,000 salary increase was ‘pension spiking’ – and sent Johnston County a bill for $435,000. In effect, the Treasurer said to Johnston County, You have to pay for the pension spike not us. 

Johnston County promptly sued. And lost. But may appeal.

It’s worth noting that the State Superintendent for Public Instruction (who serves all 100 North Carolina counties) makes $127,561 – so the retired 50-year-old Johnston County School Superintendent will be paid nearly $16,000 more for not working than the State Superintendent will be paid for working.

Does that make sense?

We hear a lot about the challenges facing teachers in the classroom. And I believe that. We have lost focus on where education actually takes place. We lavishly fund pensions for bureaucrats and administrators instead of spending money in classrooms.

That’s a lot of less than happy news – but there is a silver lining in every dark cloud: At least, now, the next time a school needs classroom supplies, we know where to find the money.

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