The governing board of the $59-billion State Teachers Retirement System voted Thursday to give its chief financial officer a 10% raise, increasing his salary and expense allowance to $286,000.
But state Controller Kathleen Connell, the only member of the board to vote against the raise, said that it was illegally excessive and that she will refuse to authorize payment.
Thomas E. Flanigan, who is responsible for investing the system's portfolio in stocks, bonds and real estate, had been paid $200,000 in each of the past four years, including the last two years of his previous contract and the first two years of his current one. He also has been receiving $60,000 for travel, office overhead and other expenses. The chief financial officer of the $90-billion Public Employees Retirement System by comparison, is paid a salary and bonus totaling $220,500.
Teachers retirement system chief James Mosman said the other board members believe that Flanigan's payment ought to reflect the increase in the cost of living for the four years since he had last gotten a raise. They say that would amount to an extra $26,000 a year.
But Connell maintains that the contract allows the board to give Flanigan a cost-of-living increase of as much as $7,400 per year, covering only the two years of the current contract.
"We think any amount in excess [of that] . . . would constitute a gift of public funds," Connell said in an interview. "This is not a comment on Tom Flanigan's performance. It is simply a legal issue."
About 141,000 retired educators and their beneficiaries currently receive income from the teachers retirement system.