Overdressed--Dressing better than the boss?

Greetings,
This is my first post on this forum, although I have been reading on and off for the last four months. I have always preferred to dress professionally commensurate with my education and desired projected image; however, I am now working as a librarian in a public school, where the dress code is abyssmal(it has steadily declined over the last five years). I also have a new boss that dresses rather casually--my question is this. Should I continue to wear suits to work, especially in light of the fact that many of my co-workers wear jeans and sneakers? I feel that I have a professional obligation to look my best (and I have always dressed for myself). Also, I am dressed better than the boss, which is something I was told was a major mistake. What are your feelings on this? I am sure that some of you on this forum dress better than your supervisors. My apologies if this question has been posted before, but I was unable to find a posting relating to this topic.

All the best
Librarian