The Return of the New Jersey Kerfuffle

Columnist Tom Moran of the Newark Star-Ledger got a copy of the New Jersey Education Association’s 2015-16 tax-exempt filings from the IRS. He discovered that NJEA officers and staff make some pretty good scratch.

Moran then wrote a column headlined, “Classroom teachers: Your union leaders are gouging you.” He noted that the top five officials made an average of $764,000 in compensation. “The big winner was the executive director, Ed Richardson, who pulled in $1.2 million, roughly twice what the national union pays its executive director,” he wrote. The rest of the column discussed NJEA’s unusual campaign against New Jersey Senate President Steve Sweeney (D-Gloucester). The story has received 626 shares and 447 comments.

The last time this happened, it involved the previous NJEA executive director, Vincent Giordano, and his roughly $450,000 in compensation.

Richardson’s salary was about $340,000. Most of the rest of the $1.2 million is “retirement and deferred compensation.” We can’t tell from the IRS filings exactly what that is, but it includes “the annual increase or decrease in actuarial value, if any, of a defined benefit plan.”

So that money most probably consists of: a) NJEA’s contribution toward Richardson’s pension for 2015-16; b) the increase in value of his pension over that year based on market performance; and c) income Richardson received on which he deferred paying taxes to a future year.

There are plenty of things to be more outraged about than the $1.2 million:

* The idea that NJEA’s executive salaries are justified because they were “approved by the members” and “voted on democratically.” Nonsense. The union’s representative bodies vote on an overall budget. Most members and even reps have no clue what the big-wigs are paid.

* The idea that Richardson is worth the money because he oversees an organization of 200,000 members. Richardson has nothing to do with 200,000 members. His job is to oversee a staff of about 550 people. Make comparisons on that basis.

* Richardson’s pension and post-retirement health benefits, and those of the rest of NJEA’s employees, total almost $220 million in liabilities. That’s almost $83 million more than the union has in assets.

* Why do people defer income? Because they want to avoid paying the higher marginal tax rates during their peak earning years. The union believes this is a sin when CEOs do it, but perfectly all right when their officers do it. Giordano retired as executive director in December 2013, but NJEA paid him $241,000 in deferred salary in 2014-15, and $159,000 in 2015-16. The previous NJEA president received $127,000 in severance pay, even though union elected officers are term-limited.

* NJEA sent $5,000 to Jeffco United for Action, a political action committee formed to elect school board candidates in Jefferson County, Colorado. Yes, Colorado. The PAC was later fined for multiple violations of the state’s fair campaign practices act.

* NJEA’s officers receive money for companion travel, a “discretionary spending account” and a $1,000 clothing allowance.

So enjoy this photo of Wendell Steinhauer’s suit from 2015, NJEA members. You paid for it.