Next Level Teacher Compensation Commission Releases Report For Improving Teacher Pay

Wednesday, December 16, 2020 at 10:20 AM

The commission was tasked with determining what constitutes competitive teacher pay in Indiana, along with providing recommendations for how to achieve it.

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(Indianapolis, Ind.) - The Next Level Teacher Compensation Commission has released its final report for improving teacher pay in Indiana.

During his 2019 State of the State Address, Governor Eric Holcomb announced that volunteer citizen members would make up the Next Level Teacher Compensation Commission as a part of his effort to make teacher pay competitive with surrounding states.

The commission was tasked with determining what constitutes competitive teacher compensation in Indiana, along with providing recommendations for how to achieve it.

The report takes a deeper look into why competitive teacher pay matters, the cost of competitive compensation, factors contributing to the teacher pay gap, and recommendations to school corporations and to state government.

Why Competitive Teacher Pay Matters

Competitive compensation for teachers is important for ensuring the success of Hoosier students through a high-quality education. A strong education system requires skilled teachers, but it also requires being able to retain the teachers through competitive compensation.

The Commission found that Indiana schools generally have not been paying their teachers competitive salaries in recent years. The Commission adds that non-competitive pay can lead to decreased popularity of entering the teaching profession; impact the quality of student instruction; and increase levels of teacher attrition.

Over 4,000 individuals completed a teacher preparation program in Indiana each year between 1999 and 2013. That number has fallen below 3,600 each year since then, and decreased below 3,105 in 2017-18, a drop of 29 percent.

Indiana’s teacher attrition rate increased from 10.4 percent in 2010 to 13 percent in 2018. The average attrition rate nationally is approximately eight percent.

Indiana data supports findings that school corporations with higher average teacher salaries have lower percentages of teachers that leave the district.48 In 2018, 88 districts (30.4 percent) had attrition rates greater than 15 percent. None of these were among the 12 districts with average salaries over $57,500.49 Only 10 of the 50 highest-paying districts had attrition rates above the state average.

The Cost of Competitive Compensation

The biggest challenge is cost.

Indiana has more than 65,500 public school teachers throughout the state. The average salary of those teachers is approximately $53,100.

A $60,000 competitive salary target was identified using data from the 2018-19 school year. Assuming pay increases in neighboring states, the pay target would increase to $60,630, up $7,530 more than the 2019-20 average salary of $53,100.

Multiplying the competitive pay gap by the total number of teachers reveals there is a teacher salary shortfall of more than $490 million.

After doing the math, the Commission concluded that more than $600 million is needed in additional compensation for teachers in Indiana.

The Recommendations

For School Corporations

Join the state’s pharmacy benefit plan (estimated $25 million in annual savings to school corporations)
Limit working spouses’ participation in district health care plans (estimated $50 million in annual savings for school corporations)
Exclude Medicare-eligible retirees from healthcare plans.
Increase utilization of centralized procurement.
Join a liability risk pool.
Right-size district teacher and staff ratios where appropriate.
Share services with other districts and external organizations.
Implement additional best practices.
Pass an operating referendum (estimated $80 million in additional annual funding)
Increase Medicaid reimbursement claims.
Increase private contributions through foundations.
Award higher salaries to teachers with high-need students and in teacher shortage subject areas
Improve flexibility for teachers to control their individual compensation through career ladder systems.

For State Government

Pay down pension debt (estimated $50 million in annual savings)
Improve procurement practices.
Incentives for expense reallocations.
Remove barriers to school corporation consolidation.
Means-test Indiana’s 529 plan tax credit (estimated $50 million in additional revenue)
Expand Medicaid reimbursement.
Township flexibility.
Tax increment financing.
Allowing deficit financing for school corporations with large cash reserves.
Encourage private donations to schools.
Reduce duration restrictions on referendum tax levies.
Establish a teacher pay tax return check-off.
Local impact fees.
State revenue increase.
Implement a statewide professional pathways compensation model for teachers.
Minimum salary.
Require teacher salaries to constitute at least 45 percent of each district’s tuition support.
Funding formula changes.
Ensure compensation transparency for teachers.
Improve school corporation data accessibility and transparency to the public:
Expand efforts to recruit more minority teachers to the profession:
Improve non-compensation-related job satisfaction among teachers (administrative):

Conclusion

“While Indiana has a significant gap to bridge before reaching competitive teacher pay, the state is well-positioned for the task. There are multiple paths to competitive compensation, and the 37 recommendations in this report provide a roadmap to school leaders and state lawmakers for achieving compensation levels and practices that will elevate the teaching profession, making Indiana’s teaching positions more attractive to the best educators and ensuring our students receive an education of the finest quality.”

I am grateful to the commission for its dedication to developing these recommendations. The report provides a wide range of actions for all to review and consider moving forward.
— Governor Eric Holcomb (@GovHolcomb) December 14, 2020

The options offer a base for continuing these important conversations about making compensation for our hard-working teachers more competitive.

Click here to read the full report: https://t.co/ETzD199vq5
— Governor Eric Holcomb (@GovHolcomb) December 14, 2020

State Sen. Jeff Raatz (R-Richmond) released the following statement:

"As chair of the Senate Committee on Education and Career Development, I want to thank the members of the Next Level Teacher Compensation Commission for their hard work and the resulting report detailing recommendations for increasing Indiana's teacher compensation. There were 37 recommendations, many practical common-sense ways, that included local school administrators and school boards diligently participating in cost-saving measures. As we weather the COVID-19 pandemic storm together, it will be difficult, but I believe that together we can find sustainable solutions to begin the track to increase teacher compensation. "