Profiting As Nonprofits: Schools Provide 'Lucrative' Pay and Benefits Despite Status
As superintendent of Kalamazoo Public Schools, Michael Rice had a total compensation of $321,252 in 2010.
Yet Rice was one of a dozen public school superintendents who signed a letter criticizing charter public schools and raising the “for-profit” status of some of the charter school’s contracted management companies.
The teachers in Rice’s district make an average of $20,000 a year more than the median income for a household in the city of Kalamazoo. The median income for a household in the city of Kalamazoo is $31,189.
The average teacher salary in Kalamazoo was $51,391 in 2010, according to the state Department of Education.
Conventional public school district officials have criticized charter schools for contracting with private management companies that are for-profit.
But public school compensation raises questions about how lucrative the conventional school districts have become despite their “nonprofit” status.
Michael Van Beek, education policy director at the Mackinac Center for Public Policy, said superintendents have often defended their compensation by comparing it to what executives in the private sector are paid for running similar sized organizations.
“In a general sense, there are all kinds of people who profit off of public education,” said Van Beek. “It seems they are unfairly targeting certain groups.”
Rice didn’t respond to an email seeking comment. Rice, who had a base salary of $208,938, took a salary freeze in 2011.
State Sens. Rebekah Warren, D-Ann Arbor, and Hoon-Yung Hopgood, D-Taylor, are pushing legislation that would ban “for profit” charter schools.
“Already in Michigan, four out of five charter schools are operated by private, for-profit education management organizations,” said Sen. Warren in a Michigan Education Association press release. “Adding a GOP proposal to lift the cap on charter schools would lead to even more for-profit schools in Michigan. Allowing these organizations to continue profiting off the backs of our children is unacceptable.”
Sen. Hopgood said encouraging businesses to make a profit on educating children was “shameful.”
Yet, the nonprofit Ann Arbor Public Schools just agreed to pay its new superintendent $1.22 million over five years (base salary of $245,000).
In fact, the nonprofit Ann Arbor school district has seen its total revenues jump from $195 million in 2005 to $207 million in 2010, despite having about 400 fewer students, according to the Michigan Department of Education.
And Taylor Public Schools pays all of its kindergarten teachers and nine elementary school gym teachers more than the city’s median income for an entire household.
The city of Taylor’s median income for a household is $42,944. Taylor Public Schools had nine elementary school phys-ed teachers and all 23 of its kindergarten teachers make more than $43,000 in 2010.
The average teacher salary in 2010 in the district was $65,477, about $23,000 more than the median household income.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.