DOUBLE-DIPPING EPIDEMIC

Most taxpayers probably don't know how good a pension deal many public employees get.  Unlike your 401(k) that your employer may or may not contribute to and all you can expect from it is whatever it's worth by the time you retire, most public employees get a defined-benefit pension.  Typically a public employee receives for the rest of his life a fixed percentage of his top salary upon leaving his job, provided that he has served a certain number of years.  For example, an employee of the City of Grand Rapids is entitled to receive one-quarter of his salary as a pension after only ten years' service with the City.

That's a swell deal.  Even better is that once you qualify to receive a City pension, you can quit your job with the City and then the City hires you back as a private consultant at your old salary minus benefits.  So now you receive both a paycheck and a pension check from the City!  We reported on this double-dipping scam a few months ago regarding the City Engineer.

Double-dipping is not restricted to the City of Grand Rapids.  A lot of the public school districts in the area do the same thing.  Senior administrators retire, begin drawing their pensions, and resume their old positions under a private consulting contracts.  The practice isn't cheap.  The annual salaries paid out can exceed $100,000, while the pension may be as much as $50,000 a year.  This is the sort of deal GRPS Superintendent Bert Bleke has set up for himself when his pension vests after only five years on the job.

The lame excuse that school superintendents give for this crap is that it saves the school district the cost of paying benefits to a retired administrator while retaining his experience.  What they never explain is why the re-hired administrator is allowed to draw his pension in the first place, which typically costs the taxpayers double the savings from not paying benefits -- which, by the way, overlooks the fact that these pensioners often do receive retirement health plans and the such.  Another lame justification is that businesses do this.  Of course, if a business owner miscalculates he loses profits or may even go bankrupt.  There is no such discipline in a public school district.  If the taxpayer cannot be tapped for more to cover double-dipping by senior administrators, then they can instead cut programs for the students.

It is uncertain how many school district condone the double-dipping practice.  The Grand Haven public school district is a particularly aggressive promoter of double-dipping with at least eight administrators drawing two checks from the taxpayers.  Other area school districts that have double-dippers are Allendale, Caledonia, Wyoming, and Zeeland.  The superintendent of the Forest Hills district, Mike Washburn, is pushing double-dipping although he knows how obnoxious the practice is to taxpayers.  (Interesting how normally craven public officials become profiles in courage in the defense of lavish compensation.)  Also, as indicated above, it appears that the Grand Rapids public school district has no objections to double-dipping if it allows Bleke to do it a year from now.

Meanwhile, kudos to Kentwood Superintendent Mary Leiker who has flat out declared double-dipping to be unethical and absolutely will not permit it in her district.

Comments

[C]

Funny how you make a point of bashing the Press at every turn, but you don't acknowledge your source material for this story. Poor double standard, Bill.

You did the same thing with the teachers pay story.
Like any blogger, you should be citing the articles that are the source for your rants.

[The Executive Director]

Dear C,

I am flattered that you regard the Local Area Watch as a serious news organization that needs to adhere to the exacting (chuckle) standards that the Press sets for itself.

Upon reflection I probably should have mentioned that SOME of the information I used in the "Double-Dipping" story came from the Press's survey -- a rare instance of investigative journalism on its part. However, like most of my articles, I rely upon information I collected myself and from public records, general news sources, etc.

"The Fixer" series for example is all my own spade work, and should have been one of the major ongoing newstories carried by the Press over the past decade. But I see you have overlooked that to nit-pick on the few times I have to rely general news sources FOR COMMENTARY like any other ordinary citizen.

Regards,
Bill Tingley
The Executive Director

[Barbara Thomas]

Double-dipping is rampant in the Detroit Public School system!!

[The Executive Director]

Hi, Barbara.

Thanks for the information. I wish I could say I was surprised. Have you alerted Channel 7 or the Detroit News about this problem?

Regards,
Bill Tingley
Executive Director

[Whats Your Problem?]

So let me get this straight...

A school board is in need of administrators no matter who fills the roll.

A new administrator has to be paid both his salary (which I believe to be too high) and his benefits. By the way what you reported about pensions be $50k is innacurate, it can be AS HIGH as $50k. In most cases it is 1/4 of the salary earned while under contract. This is what we're dealing with; 100k a year salary with a pension plan worth 1/4 of that value upon retirement.

So an administrator retires and "double dips". He is now making $75,000/ year w/o a pension being accrued. Say he's collecting his pension that was 1/4 of what he had made during his administration. This adds up to?...$100k.

So what your saying is paying an administrator 100k/year + benefits and accruing a pension is cheaper than paying an experienced consultant 100k/year straight out the door?

Correct me if I'm wrong, but that does sound like it's saving the taxpayers the pain of paying this person both salary and benefits, it also saves them the problems of having to bear through a rookie administrators mistakes.

Help me out here, I'm hoping I'm not understanding you right. Because if I am you're bitching at the wrong aspect of how much administrators are paid.

The real problem starts with their salaries. Up until a few years ago the president of the united states was paid $200,000/year, theres no way in hell an educator should ever get that kind of coin. The responsibilities aren't the same.

They're paid way too much, but double dipping seems like a way of making the load lighter for the tax payers.

[The Executive Director]

Dear Anonymous,

You're making this too complicated. If a bureaucrat wants to continue doing his job, then he shouldn't take a pension while doing it. If he wants to retire, then he retires and he's off the payroll for good. That's where the savings to taxpayers comes in by preventing double-dipping.

And yes, you're right, they are overpaid. But until the taxpayers revolt, that's not likely to change.

Regards,
Bill Tingley
Executive Director