College Coach Salaries and Tax Code

[srru86]

Washington Post

A congressman is probing coaches’ salaries. The results may be simple — and unpopular.​

Bill Pascrell of NJ. Not sure this has more legs than scoring some headlines.
The lawyers and accountants can let us know the merit of the inquiry.
Politically, I imagine you could quickly form a caucus of legislators that would modify the law to carve out whatever exception is necessary to maintain the status quo.

 

[bitnez]

We have real problems in this country. Are the salaries of 20-30 men at the top of their profession really worth the focus?

 

[WhoRU?]

I understand that it's a competitive market, but it still looks awkward when the highest-paid public employees in many states are coaches.

 

[mildone]

Ridiculous.

 

[Caliknight]

Many of those public employees are paid with private funds. Better that than college president being the most highly compensated.

Never mind Senators themselves. Barbara Boxer? Pelosi? List goes on and on.

 

[srru86]

I understand that it's a competitive market, but it still looks awkward when the highest-paid public employees in many states are coaches.

NH - Hockey Coach - Skate Free or Die I suppose?

 

[srru86]

Many of those public employees are paid with private funds

That is the bit that seems to completely escape so many. It's not like they are taking away money from the food budget in the dining all, or if we cut the coaches' salary all the leftover money would flow to the profs.

If all the money generated by football dried up these salaries would also.

 

[Shelby65]

That is the bit that seems to completely escape so many. It's not like they are taking away money from the food budget in the dining all, or if we cut the coaches' salary all the leftover money would flow to the profs.

If all the money generated by football dried up these salaries would also.

are you sure that's true ? Or is this 'state appropriation' salary which excludes income from other sources ? You aren't claiming Schiano isn't the highest paid public employee, are you ?

Either way, where salary comes from doesn't matter to the premise that college football isn't much different than pro football in the business sense and perhaps shouldn't be included in the non-profit status (educational/charitable purpose).

 

[kupuna133]

NJ has some of the weakest congressional leadership in the country. Pascrell, Pallone, Kim, Malinowski, Sherrill all do very little for their constituents. And no this is not a blue vs red thing! They all stink...

 

[mdk01]

are you sure that's true ? Or is this 'state appropriation' salary which excludes income from other sources ? You aren't claiming Schiano isn't the highest paid public employee, are you ?

Either way, where salary comes from doesn't matter to the premise that college football isn't much different than pro football in the business sense and perhaps shouldn't be included in the non-profit status (educational/charitable purpose).

I think he is saying that while Schiano may be the highest paid public employee, the funds to pay his salary are derived mostly from donations earmarked for the football program.

 

[srru86]

are you sure that's true ? Or is this 'state appropriation' salary which excludes income from other sources ? You aren't claiming Schiano isn't the highest paid public employee, are you ?

No, base or appropriation salary of the coach is the highest. The outside income is separate. But it's not like coach and the program is not generating any revenue for the school.

Professors don't like when the math is done that shows unless they teach at least one large intro/survey type course the tuition paid by the students they teach rarely covers their expenses. We did this at public college where I worked. Maybe expensive privates do better? Not sure at RU.

Either way, where salary comes from doesn't matter to the premise that college football isn't much different than pro football in the business sense and perhaps shouldn't be included in the non-profit status (educational/charitable purpose).

You can make the case that that the whole concept of college's sponsoring athletics teams is a scam or at least far from the central mission of higher ed. With or without tax breaks.

If you banned, or defunded, college football, again the problem would go away. Nothing is stopping the NFL from creating a minor league system.

But there are a lot of powerful interests that are not going to let a little thing like the tax code get in the way of their Saturdays in the fall traditions.

 

[Racinejake]

I think he is saying that while Schiano may be the highest paid public employee, the funds to pay his salary are derived mostly from donations earmarked for the football program.

The easier avenue to go after would be the deductibility at the individual level for donations made specific to athletic programs (or at least revenue generating programs). They already did this by disallowing deductions made for 'donations' made as a requirement to buy tickets.

 

[Shelby65]

yes, ok. the point of the article was that athletics strays far from the spirit/purpose of the non-profit tax exemption more than it was about salaries.

the toothpaste is out of the tube, just like with the Second Amendment, and for the reasons you say it will probably never be changed. But it smells. There's nothing more educational or charitable about college athletics than pro athletics, movies, or Disney World. It's dirty, but permanent.

 

[GoodOl'Rutgers]

I understand that it's a competitive market, but it still looks awkward when the highest-paid public employees in many states are coaches.

how much money do the non-coaches bring to their states?

 

[GoodOl'Rutgers]

Professors don't like when the math is done that shows unless they teach at least one large intro/survey type course the tuition paid by the students they teach rarely covers their expenses.

YES... every time a prof chirps up about athletics budgets this should be done. So many of them are being subsidized by students taking other classes.. or the state.. or both. And in some profitable athletics departments.. by the athletic department.

 

[NickRU714]

Talk about short-sighted and land of unintended consequences.

"“Let’s say that the New York Philharmonic decides to open a BMW dealership and start selling BMWs. That’s an unrelated business,” Colombo said, adding that critics have argued that college athletics should be subjected to the UBIT for over a decade."

If you declared the Athletic Department as UBIT and not part of tax-exempt entity then the Athletics - would the AD have no responsibility to adhere to the federal education standards and regulations or NCAA standards?

Just a couple easy questions:
Do players no longer need to attend class or maintain a minimum GPA to play?
Do recruits no longer need to meet NCAA standards to play?
Would Title IX still apply?

Why would any "NCAA" student-athlete standards still apply if the AD is considered "unrelated income" and not under the "tax exempt" designation?

 

[WhoRU?]

how much money do the non-coaches bring to their states?

Is the Texas governor worth 20x less than the football coach at A&M?

 

[Shelby65]

I think he is saying that while Schiano may be the highest paid public employee, the funds to pay his salary are derived mostly from donations earmarked for the football program.

I don't think that's true. His salary is paid by the State. He is the highest paid state employee.

For accounting/legal reasons, Rutgers can't mix its revenue streams and combine State and donation 'buckets' to pay salary from.

Now, if you want to say he gets paid via additional sources (donations), like from boosters for speaking engagements, or side cash from Nike, etc, OK. That is separate from his State salary. Rutgers pays him with State funds.

But I digress. The article was about Pascrell complaining about a tax loophole.

 

[Shelby65]

Is the Texas governor worth 20x less than the football coach at A&M?

he is worth 20x more, not less...he controls the budget from which all the state schools are supported. and his policies impact industry (oil, tech, etc.).

 

[ru-baby]

And in some profitable athletics departments.. by the athletic department

Might want to look into how often that occurs and how much the reverse is the norm. Not the sharpest point to advance the sports cost is justified argument.

 

[mdk01]

I don't think that's true. His salary is paid by the State. He is the highest paid state employee.

For accounting/legal reasons, Rutgers can't mix its revenue streams and combine State and donation 'buckets' to pay salary from.

Now, if you want to say he gets paid via additional sources (donations), like from boosters for speaking engagements, or side cash from Nike, etc, OK. That is separate from his State salary. Rutgers pays him with State funds.

But I digress. The article was about Pascrell complaining about a tax loophole.

Disagree. RU's annual revenues, from all sources, is higher than it would have been but for donations made to the football program. One big basket. And if those additional revenues exceed or equal the coach's "excess" salary then the net surplus is not diminished by that salary.

And it's really not a loophole, as a star professor or university president who gets well above the average faculty/president salary gets the same treatment.

 

[Shelby65]

Disagree. RU's annual revenues, from all sources, is higher than it would have been but for donations made to the football program. One big basket. And if those additional revenues exceed or equal the coach's "excess" salary then the net surplus is not diminished by that salary.

And it's really not a loophole, as a star professor or university president who gets well above the average faculty/president salary gets the same treatment.

you're completely missing the point. it's not a tax loophole for Schiano or any other 'star'. They pay taxes on their income. The loophole is that universities don't pay tax on their athletics income even though the multi-billion dollar college sports enterprise isn't any more educational or charitable than pro sports or other entertainment options.

You are just wrong about university salary accounting. Sure, it's one big hypothetical basket that gets everything paid but specific things need to be paid from specific buckets. He is paid on the State line. Period. That is why he's the highest paid STATE employee.

Whether or not he brings in more than he costs is a different question. Am only saying that it's not true that his Rutgers salary comes from other sources.

 

[Southern Gentleman]

yes, ok. the point of the article was that athletics strays far from the spirit/purpose of the non-profit tax exemption more than it was about salaries.

the toothpaste is out of the tube, just like with the Second Amendment, and for the reasons you say it will probably never be changed. But it smells. There's nothing more educational or charitable about college athletics than pro athletics, movies, or Disney World. It's dirty, but permanent.

I just want to understand how someone elected to Congress who is not a millionaire retires from Congress as a multi-millionaire.

 

[mildone]

I just want to understand how someone elected to Congress who is not a millionaire retires from Congress as a multi-millionaire.

Depending on how long they were in Congress, an S&P 500 index fund could’ve done the trick, with periodic buys to DCA along the way.

 

[PSU_Nut]

Wait until they go after conference money. I willing to bet some politician is right a bill that would redefine conference pay outs as profits and therefore taxing conferences on them.

 

[Shelby65]

that’s very interesting PSU. I don’t know about conference IRS status but I can’t imagine the Big10 network revenues would be tax exempt.

 

[RutgersRaRa]

you're completely missing the point. it's not a tax loophole for Schiano or any other 'star'. They pay taxes on their income. The loophole is that universities don't pay tax on their athletics income even though the multi-billion dollar college sports enterprise isn't any more educational or charitable than pro sports or other entertainment options.

You are just wrong about university salary accounting. Sure, it's one big hypothetical basket that gets everything paid but specific things need to be paid from specific buckets. He is paid on the State line. Period. That is why he's the highest paid STATE employee.

Whether or not he brings in more than he costs is a different question. Am only saying that it's not true that his Rutgers salary comes from other sources.

Even if each school moved all their athletics department's revenues and expenses off the state books and onto a single athletics entity's books, each entity would still show either a loss (most lose money) or revenue neutrality at the end of each fiscal year and pay no taxes. Alabama and tOSU and other behemoths who make tons of money show break-even at the end of their fiscal years by either donating money back to the academic side of the school or building new athletics facilities.

Ask any top-level program's players if they'd rather have their high-priced coach or bring in a freshly minted high school coach for $100k, and you've got your answer. The debate isn't being framed properly, as is almost categorically the case with public discourse led by politicians and subsequently echoed by the public.