MONEY TREE: Coveted Car Allowance Perk Remains Despite Budget Cuts
ARLINGTON HEIGHTS, Ill. (AP) — Door to door, Harper College President Kenneth Ender’s commute to work from his Inverness home is only 2.75 miles.
But Ender’s monthly car allowance — $1,000 — is enough to make a round trip to Harvard University in Cambridge, Mass., once a month, based on federal employees’ mileage reimbursement rate of 50 cents per mile. The $12,000 annual car allowance is one part of Ender’s roughly $350,000 total compensation package.
Such driving perks are fairly common for top school administrators across the Chicago suburbs, as a privilege once de rigueur in the private sector has become an expectation in taxpayer-funded public school districts. A Daily Herald survey of 69 suburban school districts turned up 30 that reported providing car allowances to one or more administrative employees. The remaining 39 responded that they compensate for business travel by the miles driven or not at all.
The allowances for top-ranking district officials averaged $6,274 this year per district.
While the numbers are not large in comparison to multimillion-dollar budgets, tax watchdog groups say the information revealed by the Daily Herald’s “Driving on Your Dime” series is incongruent with the many layoffs, program cuts and budget trimming public schools and colleges across the suburbs have been doing to stay financially afloat during the recession.
At Harper, officials defend the expenditure for their president.
Harper Trustee Laurie Stone was board president when Ender’s contract was approved last year.
“His request was very reasonable,” she said. Ender, she noted, “is traveling around a lot. His philosophy is one of creating community alliances and being very visible — not only with the high school districts and the superintendents.”
Still, with $1,000 a month you could pay for a lease on a nice luxury import — a BMW 535i — including the initial $5,484 payment spread over 36 months. And you’d still have $239 leftover each month — enough to buy more than four tanks of premium gas.
Harper has instituted a hiring freeze for full-time faculty. And in February, the board voted to raise tuition 9 percent to $98.50 per credit hour, beginning this summer.
“Working through a severe economic downturn, we have successfully managed the budget,” Ender wrote in his recent self-evaluation of his performance this year. “Most notably, the college cut $2.4 million in spending and did not fill vacant positions, despite our 7.5-percent enrollment surge.”
Ender declined an interview for this story.
The trend of providing travel stipends and take-home cars in the private sector has been headed in the other direction for some time, one compensation expert says.
What used to be a standard part of the compensation package for top corporate executives now is increasingly limited to employees who travel extensively, such as those in sales, said Don Delves, president of the Chicago-based Delves Group, an executive compensation consulting firm.
Another firm, Saddle River, N.J.-based Compensation Resources Inc., says that while private corporations have cut down on the number of employees receiving vehicle allowances in recent years, it is not a major concern.
“They’re cutting out the number of people,” Managing Director Paul Dorf said. “We know that some organizations may have gone back full circle to having a couple of company cars available for use on an ad hoc basis.
“But companies are clearly looking to save money, to try to cut back on expenses. We’ve found that’s one area. I don’t know that it’s gotten as much attention, though, as other things.”
If anything, it’s received even less attention in education.
Ben Schwarm, government relations director for the Illinois Association of School Boards, said his organization has never studied trends in car allowances.
Still, he noted, with the economic downturn, “all school districts, when they are going into contract this year — superintendent contract or teachers contract — you are certainly going to be looking at things a lot differently. Everything’s on the table this year.”
Describing the top stipends as “abuse,” Ralph Martire, executive director of Chicago-based nonprofit Center on Budget and Tax Accountability, said that in a healthy economy such perks might not be cause for concern. But with a rise in foreclosures, the state behind $1.4 billion in payments to schools and flat home values, districts across the region are slashing their budgets, cutting programs, raising fees and laying off teachers.
“It’s not enough to justify that you have the financial ability to provide these perks. You have to justify that this is an essential investment,” said Laurence Msall, director of the Civic Federation of Chicago.
“Even if the district (has the funds), it’s still facing a citizenry and taxpayers who are finding it very difficult to keep up with their property taxes and maintain their household.”
Of the six community colleges surveyed in the five-county area, McHenry County College in Crystal Lake has the leanest car allowance package.
Interim President Kathleen Plinske’s contract stipulates that the college pay $375 a month to lease a vehicle, a total of $4,500 a year.
Plinske said she agrees car allowances for top school officials have become an expectation.
Her situation, one she calls “more than adequate,” is an exception.
The leased Chrysler Pacifica, a sort of crossover between an SUV and minivan, was first used by President Walter Packard and then his replacement, Larry Tyree. The car stays parked on the Crystal Lake campus and is used only for business when Plinske needs it.
On a weekly basis, Plinske says, she does some traveling around McHenry County, to the college’s satellite facility in the city of McHenry, to various workforce investment boards. There are less frequent monthly meetings with the Illinois Presidents Council in either Springfield or Chicago. And occasionally, she says, she’ll drive the car to the airport when she goes to a college conference.
“There are many days where I don’t even use it,” she said.
“I think the reality is, it’s part of the compensation package now,” Plinske said. “My contract is very basic. I basically have my base salary. That’s really it. No housing allowance, no extra vacation days.”
At Harper, Ender announced this spring that he would not be taking a fiscal-year 2011 raise, college spokesman Phil Burdick said. After trustees gave Ender his annual review, Burdick said, the president’s three-year contract rolled over into its second year without any changes, including to salary and car allowance.