Association for Public Policy Analysis & Management

In 2011, New Jersey Governor Chris Christie adopted a new regulation that placed a salary cap on all NJ school district superintendents. Specifically, this regulation set specific cutoffs for the maximum allowable salary for each school district’s superintendent depending on the total enrollment of the district. For example, the maximum superintendent salary in a school district with an enrollment between 251 and 750 students was $135,000, while a school district with an enrollment between 751 and 1,500 students was $145,000. Overall, this policy had a substantial negative impact on salaries. In fact, some superintendents saw their base salaries drop by more than $50,000.

Not surprisingly, following the implementation of this salary cap, state and local education officials have suggested there has been a significant increase in NJ superintendents leaving their positions, or taking superintendent positions in adjacent states like Pennsylvania and Delaware. As a result, the Governor of New Jersey and the State Legislature are currently considering reforming this policy to provide more flexibility and discretion over setting superintendent salaries to local school districts.

Given the political attention that this policy has received over the last several years, it is surprising that there has yet to be any rigorous research on the unintended consequences of the NJ superintendent salary cap. The current study fills this gap in the literature by applying a regression discontinuity (RD) approach to examine the effect of New Jersey’s cap on superintendent salaries on superintendent turnover. The RD approach exploits the fact that superintendents right below an enrollment threshold (e.g. 750 students) would likely experience a significantly higher salary reduction compared to superintendents right above the enrollment threshold (e.g. 751 students). Using district-level salary data before and after the implementation of the NJ salary cap, I compare retention rates among superintendents whose district enrollments are right near the threshold of increasing the maximum allowable salary for the superintendent.

The preliminary RD results suggest that the salary cap did decrease superintendent retention rates in New Jersey. The current study adds to the anecdotal evidence currently used by NJ elected officials arguing for the reform of the NJ superintendent salary cap. In addition, the current study adds to the public management research by examining how salary reductions impact the retention rates of senior public administrators. Lastly, the current study adds to research on tax and expenditure limitations (TELs) by examining the unintended consequences of a specific expenditure limitation, a cap on public employee salaries.