Foundations help schools pay Roosevelt's $200,000 tax
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Pittsburgh's philanthropic community is giving Pittsburgh Public Schools Superintendent Mark Roosevelt $200,000 over five years to cover taxes he will owe on future life insurance benefits.
The city school board last night voted 8-0 to accept the money - from an unspecified group of foundations - and pass it on to Mr. Roosevelt.
Mark Brentley Sr. abstained, saying he had too many questions about the matter to vote for or against it.
District Solicitor Ira Weiss said the arrangement stems from an unusual and "very burdensome" section of the federal tax code pertaining to benefits for high-level officials of nonprofit organizations and government bodies.
He said the 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 benefit for years to come.
Mr. Roosevelt and board President Theresa Colaizzi said they only recently learned of the requirement.
Under contracts the board approved in March 2007 and two months ago, Mr. Roosevelt is to receive two years of district-subsidized life insurance for every year he spends with the district.
The benefit and the district's premiums commence once he leaves the district. The contracts refer to the benefit as "deferred life insurance payments."
Under the 2007 contract, the board agreed to pay an annual premium of $12,492. For every year of service, then, the district agreed to pay $24,984 for two years of life insurance once Mr. Roosevelt left the district.
Under the contract approved in October, the board agreed to pay an annual premium of $28,650. For every year of service, then, the board agreed to pay $57,300 for two years of life insurance.
The contracts allowed the superintendent to select the insurance policy; the payout amount of the policy wasn't given in the contracts.
According to the 2007 contract, Mr. Roosevelt became entitled to the benefit once he completed four years with the district - a milestone reached in August.
Now that he is "vested," Mr. Roosevelt said, he must begin paying taxes on the benefit, even though the district won't pay any premiums until he leaves the district. He said the foundations agreed to help ease the burden.
Mr. Weiss said the group of contributing foundations was "not yet finalized."
Mr. Roosevelt's salary this school year is $225,000. In addition to life insurance after he leaves the district, the board provides him that benefit now.
The board also voted last night to name its new International Baccalaureate school in Shadyside the Barack Obama International Studies Academy. Officials said other cities already have named schools for Mr. Obama.
First Published December 16, 2009 12:00 am