According to published reports several anonymous foundations have decided to offer $200k over the next five years to the Pittsburgh Public Schools in order to pay taxes on a life insurance benefit to the current Superintendent. According to the District’s Solicitor the Federal tax code "requires the recipient to pay taxes on employer-paid life insurance premiums in the short term, even if the recipient won’t receive the benefits for years to come".
Consider that this past October, when the District extended a new contract with the Superintendent, a news article pointed out that the agreement included "An increase-from about $12,500 to about $28,700- [in] the district’s annual contribution to a life insurance policy of his choosing. As before, the district also will provide him a separate $400,000 term life insurance policy…[and] a one-time payment of $16,150. The agreement doesn’t explain that payment, but [the Superintendent] said it, too, is for life insurance".
Rather than extend $200k for taxes on top of what appear to be quite generous benefits, a better use of the money-certainly one that would deliver long term benefits-would be for the foundations to offer scholarships of $10k for four years for five students to attend the private or parochial school of their family’s choosing.
This would be a very targeted program and would certainly be criticized as leaving much of the district’s enrollment out, but what would be more preferable: giving some students choice, or helping to pay the taxes on a life insurance policy for the District’s highest official?
