On Sept. 17, 20 weeks after his announced resignation, Maryland’s highest paid public-school employee will end his tenure as CEO of the Prince George’s County Public Schools. On July 12, PGCPS announced Kevin Maxwell’s severance package as $790,000, a sum that many considered excessive. The teachers’ union president attacked it as “appalling.”
But this sum grossly understates the actual cost of Maxwell’s post-employment compensation. Most notably, it fails to include the increased value of his Maryland state pension. When that compensation is factored in, the cost of his severance package doubles to approximately $1.6 million, with most of the unreported amount being paid by Maryland rather than the county school system. The total value of Maxwell’s pension package is about $4.8 million.
From one perspective, $1.6 million is a steal for taxpayers, because PGCPS had a four-year contract with Maxwell beginning last year. The cost of the remaining three years would have been more than $1 million in cash compensation plus additional pension benefits.
One reason PGCPS could be so generous in bolstering Maxwell’s pension is that Maryland, rather than PGCPS, pays for such pension spikes. The Board of Education wasn’t lying, then, when it said that the cost of Maxwell’s severance package would only cost PGCPS approximately $790,000.
To eliminate pension spiking, as illustrated by Maxwell’s case, pension costs should be completely shifted from the state to local level. Relying on the state to effectively eliminate pension spiking by tinkering with its rules not only has not worked, but cannot work.
Another reason that PGCPS could be so generous is that Maryland’s right-to-know laws have been designed to hide the type of pension spiking that PGCPS engaged in. To the extent that pension spiking can be hidden, it will thrive.
Maryland should require pension transparency at the individual level, just as it does for salary transparency. If the excuse for hiding pension data — e.g., unused sick leave — is protecting privacy, the solution is to change the pension formula, not to hide its components. Moreover, to have meaningful public disclosure, all compensation information must be proactively disclosed online. Relying on Maryland’s archaic and ineffective Public Information Act for K-12 public school compensation disclosure has been a recipe for public officials’ endless delays, doubletalk, noncompliance, and intimidation and deterrence of requesters.
Maryland’s local governments and teachers unions are staunchly opposed to these proposed reforms. Perhaps the best hope for reform is Gov. Larry Hogan’s new Office of Education Accountability, which began operation on Sept. 12 and is tasked with investigating K-12 public school corruption. But the General Assembly is unlikely to grant this office the subpoena power it needs to do its job effectively.
PGCPS ripped off the rest of Maryland, including Prince George’s County more generally, and then hid the full extent of its payouts from the public. If the law cannot be fixed, we should at least be able to expect a frank discussion from Prince George’s Board of Education and acting school superintendent.
Alas, this is legally prohibited because part of Maxwell’s severance contract mandates that neither the school board nor superintendent can henceforth engage in any public discussion that might be construed as “disparaging” to Maxwell. Since the public and press depend on conflict among such insiders to understand controversial issues, this ban harms First Amendment values of free speech. It should be challenged in court.
Given the practical difficulty of holding this conversation in Prince George’s County, it should be held elsewhere in Maryland. It should be central to the discussion of the Kirwan Commission Report, which will call for higher K-12 compensation, when it is publicly released after the November election. The public is entitled to know how much its public school employees are paid. Until the public has this information, including the huge and growing discrepancy in total compensation between junior and senior teachers, no changes in compensation should be made.
Maxwell’s case vividly illustrates not only how little the public knows about the magnitude and components of total public-school employee compensation, but also the perverse incentives that go into setting and disclosing it, especially when local governments determine its cost but the state pays for it.
J.H. Snider, the president of iSolon.org, publishes K12 Public School Compensation Transparency.