Over the past couple of years, the education system has called for a $5,000 teacher pay raise. Oklahoma’s statutory starting salary for first-year teachers is set at $31,600. While this is the statutory minimum, it does not include the cost of state-supplied health insurance and the generous state contribution to the teacher pension fund. Advocates of the teacher pay raise are seeking an increase to the minimum starting salary as well.
Schools have 4 funding sources: 1. ad valorem, 2. state appropriation (foundation state aid formula), 3. direct apportionment form taxes and fees, and federal funds. The calculations in the state aid formula are based on the average daily membership of students in the district for the current and previous two years and use whichever is the largest. The formula also weights the students at different grade levels, students with special needs, bilingual students, gifted students, economically disadvantaged students and the districts level of isolation (school district’s size and population density). The offsets to scoring for foundational state aid is local funding (property taxes), and the districts projected state dedicated revenues (tax and fee apportionments). The dedicated revenues are from school land earning, gross production taxes, motor vehicle taxes, and rural electric association taxes. These direct and local revenues are used to adjust up or down the foundation state aid. There are nearly 50 school districts where the local and direct revenues dramatically affect the amount of foundation state aid.
How is the legislature going to implement a $5,000 a year teacher pay raise? How much is this increase? The concern is getting the money from the state to the local school districts and then it is how local school districts and school boards are going to allocate those funds. The other concern is not t
he net effect of a teacher seeing about $415 more in their paycheck each month, but the cost in payroll taxes to the district and the cost of the teacher retirement contribution per teacher by the state. Payroll taxes will cost $382.50 for the school district per teacher additionally and $475 for the state contribution to the teacher pension.
The voters of Oklahoma rejected at the polls last November calling for an increase in sales tax rate to create a dedicated funding stream to the education system. This increase was heavily weighted toward high education but the main component was to fund a $5,000 per year per teacher pay raise. The problem with arbitrarily handing out a $5,000 teacher pay raise is a teacher making a lower salary will be receiving a greater percentage increase than a teacher that has longevity and their pay is higher.
Setting aside the argument of finding current state revenue or increasing taxes to provide for the purposed $289 million needed to for the teacher pay raise, is how best and the most efficient way to get the money to the teacher’s paycheck. If the goal is to get teacher retention and increase the educational opportunities and outcome of Oklahoma children, then appropriating money from the state that gets passed down through the inefficient foundational state aid formula is not the way to do it. Instead, let the people who receive the benefits of the teacher’s labor decide. A teacher has a labor skill set that they trade for payment in the form of an annual salary from the school district. The customer or the student benefits from the labor of the teacher in the way of learning.
There are approximately 687,000 children enrolled in public schools across Oklahoma (taking out 8,000 online students). Take the $289 million dollars that have been purposed and divide by the number of school-age children in Oklahoma and you get $420 per child. This is the amount that each child will receive in the form of a voucher or certificate. On this voucher or certificate, the child and or parents can designate how much they want to allocate to the teacher and or teachers of their choice (with the max of $5,000). They will turn the voucher or certificate into their school district. The school district then will add up and document and send to the state to redeem the pay increase for in-class instructional teachers. Some teacher might get the max while other teachers may not. This is a fully transparent and competitive way to give the increase. It also gives fairness to school districts that receive greater foundation state aid per pupil versus other school districts that receive little to no foundation state aid per pupil.
The state should set aside enough state appropriated dollars to fund the payroll taxes that will be increased and the increased state contributions to the teacher pension fund. This should be an additional $36 million.
How is foundation state aid distributed?
Is Oklahoma teacher pay really 49th in the nation for teacher pay?