Let’s Talk About Money

Teacher pay matters – TN policymakers don’t get it

Yes, it’s about money.

Despite Gov. Bill Lee and his GOP allies claiming to invest in teachers, average teacher pay in the state is still among the lowest in the nation.

From National Education Association analysis of teacher pay

And a new report suggests the teacher pay penalty – the gap between teacher pay and the pay of other comparably-educated professionals – is at an all-time high.

The latest data says the “teacher pay penalty” – the gap between teacher compensation and the pay of other professionals – is now at an all-time high – 27%.

Of further concern:

Young people’s interest in education continues to slide as they recognize “many downsides” to teaching, including its unattractive pay. 

Since 2009, Tennessee has identified shortages in the overall numbers of K-12 teachers needed for public schools as well as teachers for specific subjects. There is a critical need in the state for STEM teachers, as well as shortages in high school English, social studies, world languages, Pre-K through high school special education, and English as a second language.

In short, policymakers have been aware of this problem for a long, long time.

Now, the crisis is acute – and nothing is being done.

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Why Not Make Teacher Starting Pay $60,000?

State’s revenue surplus stuffed under mattresses, teachers, schools left behind

As I read through Tennessee’s latest revenue update, I can’t help but think that state leaders are acting like a “broke dad” when all the evidence points to the opposite.

So far this year, Tennessee has taken in $1.2 billion MORE than was estimated.

On the low end, it seems likely that the state will have a $2 billion surplus THIS YEAR when all is said and done.

THIS KEEPS HAPPENING

As I noted in The Education Report, Tennessee has a “broke dad” mentality.

Let me put it this way: You’re a parent. You have a paid for house, two paid for cars, and enough money in the bank that you can NOT work for a year and still cover basic expenses.

Is that the time when you tell your family that you will all be moving into a car and sleeping in the parking lot of a nearby park?

On a range of issues – from the DCS crisis to third grade retention to teacher compensation, Tennessee policymakers are refusing to invest the revenue provided by taxpayers.

A recent report indicated that only 25% of Tennessee teachers earn $60,000 or more a year.

Here’s an idea: Make the starting pay for Tennessee’s teachers $60,000.

Do it THIS YEAR.

The state can afford it.

In fact, given the teacher shortage, the state really can’t afford not to do it.

Unless, that is, the state is hurtling toward full privatization of public schools and figures public K-12 teacher salaries won’t be the state’s worry soon.

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For more on education politics and policy in Tennessee, follow @TNEdReport

Do We Really Have to Do This?

I mean, really? The Tennessee House Republican Caucus sent out a tweet today bragging about the amount of money the state has invested in teacher pay over the past decade.

Here it is:

I’m not even sure where to start. Well, actually, I am.

  1. $616.5 million sounds great, and it’s neat to aggregate data over a decade, but that BIG number averages out to about $62 million per year. That’s about a 2% increase in the BEP salary allocation (not actual money in paychecks) each year. Calm down a little, already.
  2. Did I mention that $616.5 million might sound great? So, the TN House GOP is all excited about spending $616 million plus over TEN years, while the state is sitting on a $3.1 billion surplus this year alone! That means we could spend $616 million in teacher salaries THIS YEAR and still have more than $2.4 billion LEFT to spend. Read that again. Republicans are bragging about taking an entire decade to allocate in total what is available THIS year and could be funded while still leaving $2.4 billion for other priorities.
  3. A bipartisan group of policymakers reports that we need $1.7 billion in a SINGLE year in order to adequately fund the BEP. That’s because the BEP badly underestimates the number of teachers actually needed to staff schools. Of course, the BEP also fails to take into account proper ratios for school nurses or school counselors. The BEP is pretty much broken, and has been for some time.
  4. It was Republican Gov. Bill Haslam who stopped the BEP 2.0 formula that was an attempt to correct and improve the BEP allocation.
  5. Remember that time when Gov. Haslam got all excited about our NAEP scores and promised a big raise to teachers and then cancelled the raise? Remember how after he cancelled the raise, revenue numbers came in at a level that meant the raise really could have been funded? Good times.
  6. Oh, yeah. School districts fund significantly more teachers than the BEP allocates. Yes, this has been a known problem for some time. Yes, the GOP has been running most of state government for over a decade. No, they haven’t done anything to fix it.
  7. There was also that time when the Haslam Department of Education called on the State Board of Education to give local districts flexibility with BEP salary money. Essentially, this created a situation where the 4% BEP salary allocation increase became a 2% (or less) raise.
  8. Remember the time when Gov. Bill Lee gave a big increase in state funding to charter schools and a tiny raise to teachers? Wonder if teachers remember that? I bet that makes them feel really appreciated.
  9. Remember the year when Gov. Lee became the second governor in a row named Bill to promise teachers a big raise and then cancel it when things got tough? Because, yeah, that was 2020. How’d that tough budget Lee was worried about turn out? Oh, right, that’s the one with the $3.1 billion surplus.
  10. Finally, in the recently concluded special session, Gov. Lee proposed and his legislative leadership secured passage of legislation giving teachers a 10 cents on the dollar COVID raise. That’s right, in a year when there’s plenty of cash and teachers are working more and harder than ever, Gov. Lee is placing the value of teachers at 10 cents on the dollar.
  11. Oh, and yes, Tennessee consistently receives a grade of “F” in both school funding and school funding effort from national groups who analyze state level investment in schools.

So, try again TN House GOP tweeter. Maybe next time, do some math and take a look at the archives.

For more on education politics and policy in Tennessee, follow @TNEdReport

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Money Storm

It’s raining money in Tennessee as recently-released projections suggest state policymakers could have as much as $3.1 billion EXTRA to allocate when they return for the regular legislative session next week.

This is, of course, a very good position. However, it’s not at all clear the state will allocate those resources into meaningful investments that improve the quality of life in Tennessee.

Take the action on teacher compensation during the special session as an example. Despite early reports that revenue would be higher than anticipated, Gov. Bill Lee’s teacher pay adjustment amounted to roughly 10 cents on the dollar compared to the extra work teachers have been doing during the pandemic. There was little meaningful investment in public schools at all, really.

In case you’re curious about how we got to a place where we have $3.1 billion extra to spend, the Sycamore Institute breaks it down.

In late March 2020, consumer spending in Tennessee dropped 27% below January levels – compared to 32% nationally. Soon after, the state received billions in federal aid designed to provide economic relief to citizens, businesses, and health care providers. After federal stimulus payments and enhanced unemployment benefits began in mid-April, Tennessee’s consumer spending rebounded close to pre-pandemic levels, while spending nationwide remained down by about 16%. (1) (2) Meanwhile, prior changes to state law took effect in July 2020 that led the state to collect sales tax on more internet purchases.

Here’s the breakdown of the extra cash:

Compared to the current budget, the governor and state lawmakers may have about $3.1 billion in additional General Fund revenue† to allocate this session (Figure 3). Based on the upper end of the annual Funding Board ranges, this includes:

$476 million (non-recurring) from the FY 2020 surplus (8)

$1.1 billion (non-recurring) from projected FY 2021 collections above official budgeted estimates (4)

$1.5 billion (recurring) from the increased FY 2021 base plus projected FY 2022 growth (4)

It’s worth noting here that TACIR – a bipartisan group of policymakers that studies and reports on government activity in the state – reports that Tennessee needs $1.7 billion to adequately fund the BEP.

So, good news! We can afford to make a significant investment that closes this funding gap. I look forward to Gov. Bill Lee’s State of the State next week where he announces that based on these new numbers, he’s making a record-setting investment in public schools and plans to do so throughout the remainder of his term.

But, who am I kidding? Gov. Lee isn’t going to do that. Heck, Lt. Gov. McNally has already talked about finding new ways to offer more tax cuts rather than making new investments.

Tennessee has tried a lot of experiments when it comes to our public schools. One thing we haven’t tried, though, is really investing in them.

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The Teacher Pay Penalty

Economic Policy Institute is out with its annual look at the teacher pay penalty. Here’s more:

As we have shown in our more than a decade and a half of work on the topic, there has been a long-trending erosion of teacher wages and compensation relative to other college graduates.1 Simply put, teachers are paid less (in wages and compensation) than other college-educated workers with similar experience and other characteristics, and this financial penalty discourages college students from entering the teaching profession and makes it difficult for school districts to keep current teachers in the classroom.

Key findings

  • The teacher wage penalty has grown substantially since the mid-1990s. The teacher wage penalty is how much less, in percentage terms, public school teachers are paid in weekly wages relative to other college-educated workers (after accounting for factors known to affect earnings such as education, experience, and state residence). The regression-adjusted teaching wage penalty was 6.0% in 1996. In 2019, the penalty was 19.2%, reflecting a 2.8 percentage-point improvement compared with a penalty of 22.0% a year earlier.
  • The teacher wage penalty declined in the wake of recent teacher strikes but only time and more data will reveal whether teachers’ actions led to a decline and a turning point. The lessening of the teaching penalty from 22.0% in 2018 to 19.2% in 2019 may reflect pay raises enacted in the wake of widespread strikes and other actions by teachers in 2018 and 2019, particularly in some of the states where teacher pay lagged the most. Unfortunately, the data we have to date are not sufficient to allow us to identify the geographic locus of the improvements in teacher wages and benefits and any association with the recent wave of teacher protests and strikes. Only time will tell if this single data point marks a turning point in teacher pay.
  • The wage premium that women teachers experienced in the 1960s and 1970s has been replaced by a significant wage penalty. As noted in our previous research, women teachers enjoyed a 14.7% wage premium in 1960, meaning they were paid 14.7% more than comparably educated and experienced women in other occupations. In 2019, women teachers were earning 13.2% less in weekly wages than their nonteaching counterparts were—a 27.9 percentage-point swing over the last six decades.
  • The wage penalty for men in teaching is much larger than it is for women in the profession, and it too has worsened considerably. The teacher wage penalty for men was 16.6% in 1979. In 2019, male teachers earned 30.2% less than similar male college graduates who chose a different profession. This explains, to a large degree, why only one in four teachers are men.
  • While teacher wage penalties have worsened over time, some of the increase may be attributable to a tradeoff school districts make between pay and benefits. In other words, school districts may not be giving teachers raises but are instead offering stable or slightly better benefits, such that benefits make up a larger share of the overall compensation package for teachers than for other professionals. In 2019, nonwage benefits made up a greater share of total compensation for teachers (29.3%) than for other professionals (21.4%). In 2004, nonwage benefits share of compensation was 20.7% for teachers and 18.7% for other professionals.
  • The benefits advantage of teachers has not been enough to offset the growing wage penalty. The teacher total compensation penalty was 10.2% in 2019 (composed of a 19.2% wage penalty offset by a 9.0% benefits advantage). The bottom line is that the teacher total compensation penalty grew by 7.5 percentage points from 1993 to 2019.
  • The teacher wage penalty exceeds 20% in 21 states and in the District of Columbia. Teacher weekly wage penalties for each state, computed using pooled 2014–2019 data, range from 2.0% in Wyoming to 32.7% in Virginia. In 21 states and the District of Columbia teachers are paid less than 80 cents on the dollar earned by similar college-educated workers.

In Tennessee, the teacher wage penalty is 21.4%

Read more

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Bargain Prices on Teachers in Tennessee

Two years ago, I wrote about the teacher wage gap in Tennessee — the fact that teachers in Tennessee earned nearly 30% less than similarly prepared professionals. Now, the Economic Policy Institute has updated their study of teacher pay relative to other professions.

Guess what?

Tennessee teachers still come at bargain basement prices!

While there is some (slightly) encouraging news, the bottom line: Teacher pay in Tennessee is still not really improving relative to other professions.

This year’s results indicate a national average teacher pay gap of 23.8%. Tennessee’s gap is 27.3%. That’s an improvement of two points for Tennessee, which had a gap of 29.3% two years ago.

That said, Tennessee’s gap is still worse than the national average and among the worst in the Southeast.

Of 12 Southeastern states, Tennessee ranks 8th in teacher pay gap — that’s up one place from 9th two years ago.

Here are the numbers:

Mississippi                   18.9%

South Carolina            20.5%

West Virginia              21.2%

Louisiana                     23.5%

Arkansas                      24.3%

Kentucky                     24.6%

Florida                         25.7%

Tennessee              27.3%

Georgia                       29%

Alabama                     29.4%

Virginia                      33.6%

North Carolina         35.5%

 

Yes, the authors acknowledge that teacher benefit packages tend to be more generous than those offered other professionals. By their analysis, teachers have a benefits package that is a bit more than 7% more generous than similar professionals. The most expensive of these benefits is healthcare, followed by defined-benefit pensions.

Tennessee teacher healthcare benefits vary by district, but for the purpose of this discussion, we’ll assume that Tennessee teachers receive the national average benefits advantage.

Doing so means Tennessee teachers are still paid 20% less than similarly-trained professionals.

While some progress on this front is better than none at all, continuing down this road is not sustainable. Investing in teachers by providing compensation on par with other professions requiring similar education and training is essential to recruitment and retention.

Tennessee’s next Governor and the General Assembly sworn-in in January of 2019 should move past studying the issue and get to work finding long-term solutions to close this gap and pay our teachers the salaries they deserve.

 

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Mike’s Misnomer

State Representative Mike Sparks feels like Tennessee teachers are adequately paid. In fact, he’s so sure of this fact, he wants a website to demonstrate the generous pay teachers in our state receive.

Michelle Willard in the Murfreesboro Voice has more:

“It seems like there’s a misnomer out there that teachers are very low paid,” Sparks said at the State House Education and Planning Subcommittee

Sparks was promoting a bill to require teacher salaries to be posted online.

Here’s the thing: Districts already post pay scales online.

Also, the state sets minimum pay standards — and they are, in fact, pretty low. The current state pay scale indicates a teacher with a bachelor’s degree and no experience must earn a starting salary of at least $33,745. Put in 10 years and your minimum jumps up to $40,595. And, that’s it! If you have a bachelor’s degree and 10 or more years of experience, your district is not required to pay you anymore than just over $40,000.

Now, most districts offer pay that exceeds the state minimum. In some cases, though, it’s not by much. Further, the state’s BEP Review Committee (the group that studies and reports on the school funding formula) notes a pretty steady gap of around 40% between the highest and lowest paying districts in the state.

When that gap hit 45% percent back in the early 2000s, the Tennessee Supreme Court ruled that school funding in our state was unconstitutional because it was not substantially equal across districts.

Sparks is also apparently not concerned that Tennessee teachers earn about 30% less than comparably educated professionals. He would do well to take some time and understand the deeper issues in our state’s funding formula — namely, that it’s not exactly adequate and that it continues to foster inequality across districts.

Instead of seeking solutions, Sparks wants to let Tennesseans in on the secret of just how much teachers are paid. Those of us actually paying attention already know – it’s not nearly enough and it’s not getting better.

For more on education politics and policy in Tennessee, follow @TNEdReport


 

F for Effort

Another day, another story about how Tennessee is failing to invest in schools.

The National Report Card on School Funding Fairness indicates Tennessee is not trying very hard (the rhetoric of Governor Bill Haslam notwithstanding).

The Report Card analyzes several indicators of school funding to determine how a state supports schools. The most basic is raw spending on schools. Here, Tennessee ranks 43rd in the nation. So, still near the bottom.

How does Tennessee distribute funding in high-poverty vs. low-poverty districts? Not great, but not terrible. The Report Card awards a grade of C and uses per pupil spending data to demonstrate that high-poverty districts (those with 30% or more of students on Free/Reduced Lunch) spend about 3% less than low-poverty districts. Of course, fairness would dictate that those high-poverty districts spend a bit more, but Tennessee is in the category of states doing an average job in this regard. Our state funding formula (the BEP) is supposed to ensure some level of equity, but the funding may not be enough in those districts lacking the resources to provide significant funds for schools.

Here’s the real problem: We’re not trying very hard to do better.

Tennessee earns a grade of F when it comes to funding effort compared to funding ability. The researchers looked at Gross State Product and Personal Income data in order to determine a state’s funding ability then looked at dollars spent per $1000 (in either GSP or Personal Income) to determine effort. Tennessee spends $29 on schools for every $1000 generated in Gross State Product. When it comes to Personal Income, Tennessee spends just $33 per $1000 of average personal income. That’s a rank of 42 in both.

Then, the report looks at wage competitiveness — how much teachers earn relative to similarly-educated professionals. I’ve written about this before, and Tennessee typically doesn’t do well in this regard.

According to the Report Card, Tennessee ranks 42nd in wage competitiveness, with teachers here earning 24% less on average than similarly-prepared professionals.

I noted recently that we’re also not doing much to improve teacher pay (again, despite Bill Haslam’s claims).

The good news: There’s an election this year. A chance for a new Governor and new members of the General Assembly to take a fresh look at education in 2019. Voters should ask those seeking these offices how they plan to improve Tennessee’s low rankings and move our state forward when it comes to public education. Clearly, we can’t pursue the same low dollar strategy we’ve been using.

For more on education politics and policy in Tennessee, follow @TNEdReport


 

Not So Fast

Back in October of 2013, Governor Bill Haslam tweeted: “Teachers are the key to classroom success and we’re seeing real progress.  We want to be the fastest improving state in teacher salaries.”

Then, by April of 2014, he promptly broke that promise, giving no raise at all in that budget year.

Since 2014, however, Haslam has found funds to modestly increase the BEP allocation for teacher compensation each year.

So, as we’re in the last year of Haslam’s term, I thought it’d be interesting to see if Tennessee has, indeed, been the fastest improving state in teacher salaries since 2013.

The short (and unsurprising) answer is: No.

Using state data compiled by the National Education Association, I looked at salaries across the states.

Average teacher salaries in the United States improved by about 4% from the Haslam Promise until this year. Average teacher salaries in Tennessee improved by just under 2% over the same time period. So, since Bill Haslam promised teachers we’d be the fastest improving in teacher pay, we’ve actually been improving at a rate that’s half the national average. No, we’re not the slowest improving state in teacher pay, but we’re also not even improving at the average rate.

By contrast, states like California and North Carolina have seen increases of over 9% over the same time period, making them the two fastest improving states. Vermont is close behind at just over a 7% total increase.

Let’s pull back and take a look at teacher pay since Bill Haslam has been Governor (starting in 2011).

Tennessee teacher pay has increased by 5.3% over that time. The national average over the same time period was 5.7%. So, for the entire time Bill Haslam has been Governor of Tennessee, teacher pay in our state has been improving at a rate below the national average.

So, maybe we can’t be the fastest improving in the nation in teacher pay. Could we be the fastest improving in the South? Nope. That title belongs to North Carolina.

Let’s look at these states: North Carolina, Virginia, South Carolina, Mississippi, Tennessee, Louisiana, Kentucky, Florida, Georgia, Arkansas, and Alabama.

Of these 11 states in the South, Tennessee ranks 9th in terms of average increase in teacher pay since the Haslam Promise. We’re not even at the average of these states, which is 3.3%. Since Bill Haslam promised Tennessee teachers their pay would increase faster than any other state in the nation, our teachers have seen their pay increase at half the rate of neighboring states.

That’s not very fast. At all.

For more on education politics and policy in Tennessee, follow @TNEdReport


 

Trade Your Pension for Better Pay?

That’s one proposal made by the Nashville Chamber of Commerce in its Report Card on Metro Nashville Public Schools (MNPS).

The idea is that if new teachers forego their pension, they could take the savings in higher pay. The Chamber believes that higher pay would help the district attract teachers and encourage them to stay in the district once hired.

An analysis of teacher pay across similar districts found Nashville to lag behind its peers in terms of both starting pay and lifetime earnings.

While raising teacher pay certainly has merit in terms of both attracting talent and keeping teachers in the system, it’s important to look at the tradeoff between pensions and salaries.

Under the current pension system (recently revised) Tennessee teachers are eligible to retire with full pension benefits after they reach a combined number of 90 in years of service and age. That means a teacher who starts at 22 would need to teach until they are 56 in order to retire with full pension benefits.

At current salary levels, a teacher would sacrifice a pension benefit of around $25,000 per year. Factoring an average life expectancy, a teacher who decided to give up her pension would lose benefits totaling $625,000.

That means to make up the actual dollar value of the pension benefit, teachers would need to make about $18,000 more per year than they do now. Again, this assumes retirement after 34 years.

At current levels, this would move starting pay in MNPS to around $59,000 per year.

Alternatively, the district could make starting pay a bit lower and build in larger raises later. That may have the benefit of encouraging teachers to stay. To be competitive, starting pay should probably be raised to around $50,000. Again, though, if teachers are foregoing a $625,000 potential benefit, raises should be built-in to ensure they can earn that benefit over the course of their service.

While the Chamber may be correct that younger teachers are not necessarily as concerned with pensions as those in the past, it should be made clear that giving up a pension is a big financial sacrifice in the long-term. If such an idea is pursued, teachers should certainly be compensated at a level that makes up for that sacrifice over time.

For more on education politics and policy in Tennessee, follow @TNEdReport