Guest Column: Double-Dipping Loophole Lets School Chiefs Cash In at Taxpayer Expense
Opinion Advocates for ideas and draws conclusions based on the author/producer’s interpretation of facts and data.
By Former Lakeland Trustee Karen Haines Pressman
The phrase “double-dipping” typically refers to a controversial practice in which a government employee retires to begin receiving pension benefits. Then they are rehired by the same or a different government agency and continue to draw a salary. This often results in a substantial pay increase for the employee, as pension payments alone can account for up to an estimated 60 percent of the employee’s final average salary.
For most government employees, there are limits on double-dipping. Once they retire, additional income is capped at $35,000 and requires special approvals. But there is an exception for public school or BOCES employees, who are currently not subject to the income cap or other requirements. This exemption, which was extended until June 2027, is intended to ease the teacher shortage by providing an incentive for retired teachers to return to the classroom.
But there are examples of high-salaried district superintendents cashing in on it. Most notably in 2021, the Harrison Board of Education (BOE) reached an agreement with Dr. Louis Wool that awarded him $700,000 in a double-dipping arrangement. Although there was widespread agreement that Dr. Wool was a highly effective leader in the district for 19 years, others questioned whether this was appropriate compensation for a government employee in a state with one of the highest tax burdens in the country.
The Dubious Cost-Savings of Double-Dipping
In August, some Lakeland teachers and residents were surprised to see that its superintendent, Dr. Karen Gagliardi, was no longer listed on the district’s website, and another administrator was named “Interim Superintendent.” The Lakeland BOE made no public announcement about the change until its business meeting a few days later. Board president Becky Burfeind briefly stated that Dr. Gagliardi had retired and then been rehired under a new three-year contract. In other words, Dr. Gagliardi joined the ranks of double-dippers.
The agency paying the salary, Lakeland in this case, saves money because it’s no longer required to fund the employee’s benefits. They might even pay the employee a lower salary, which the Lakeland BOE claims is the case for Dr. Gagliardi (a request was made for her contract, but the district has delayed its release until at least September 12). However, pension benefits are constitutionally guaranteed by taxpayers. In fact, state and local governments pay over $5 billion per year of taxpayer dollars into the pension system. On the surface, double-dipping seems to make good fiscal sense. But ultimately, the employee earns more money (sometimes a lot more), while taxpayers foot the bill.
Districts may save on salary and benefits in the short term, but taxpayers still pay more overall. Retirees receive both a public pension and a new salary, adding long-term costs to the pension system.
The Potential Impact on Other Districts in the Region
Double-dipping arrangements are a poor way to manage public funds. They also set a precedent that could spread to other districts, especially if Dr. Gagliardi’s new compensation package puts her ahead of more-experienced peers. The cumulative impact on the pension system could be serious if other superintendents and BOEs in the region, and across the state, follow suit. There are also concerns that it undermines public trust, stifles new ideas, and reduces opportunities for up-and-coming talent.
In our region, many superintendents earn $300,000 or more, including in Briarcliff Manor, Chappaqua, Katonah-Lewisboro, and Yorktown, and would benefit from the double-dipping loophole. While Pleasantville’s superintendent did not take advantage of double-dipping, the BOE “quietly agreed to pay Dr. Tina DeSa nearly $300,000 in taxpayer funds to step down from her position one year early,” as reported by The Examiner News in July. Taxpayers need to push BOEs to be more transparent about superintendent contracts, double-dipping or otherwise.
Another consideration is performance-based. Lakeland’s situation is more concerning than Harrison’s because, unlike Dr. Wool, Dr. Gagliardi was only appointed superintendent in March 2022, has no prior superintendent experience, and has received mixed reviews from the community. Residents have publicly questioned her decision-making on topics such as the restructuring of the counseling department, the elimination of funding for Destination Imagination, the signing of the federal government’s anti-DEI order, and an overall lack of transparency, among other issues.
Legislators Should Close the Loophole for Administrators
There is a growing call from the public for legislators to close the loophole for highly-paid administrators and require them to seek prior approval from New York State for income in excess of the $35,000 cap. To gain approval, administrators and BOEs would need to demonstrate good cause, such as the inability to find another suitable candidate for the position after conducting a public search. This would still allow classroom teachers to benefit from the relaxed rules, which is defensible because of shortages.
Residents of neighboring districts should see Lakeland as a warning. Because its BOE made this decision without public input, there was no chance to address valid criticisms, the community’s voice was effectively silenced, and a problematic administrator was rewarded.
Double-dipping arrangements may be legal, but when used in this manner, they are also unethical.
Karen Haines Pressman is co-founder of Lakeland Residents in Support of Education (RISE), a grassroots advocacy group, and a former Lakeland Board of Education trustee.
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