Indiana report calls for $600 million more from districts, state to increase teacher pay

Thousands of Indiana teachers marched around the Statehouse at the Red for Ed rally on Tuesday, Nov. 19, 2019.
A new report released Monday includes 37 recommendations for how Indiana can increase teacher pay. (Stephanie Wang/Chalkbeat)

A report released Monday pressures Indiana school districts to pay a large part of the estimated $600 million a year needed to raise teacher pay. But it acknowledges the state also must substantially increase funding to make salaries more competitive. 

Gov. Eric Holcomb’s teacher pay commission has been working on the recommendations for nearly two years. The commission calls for increasing average teacher salaries to $60,000 per year, up from about $51,000. 

The report includes 37 recommendations to increase teacher pay. About a dozen suggestions offer ways for local districts to trim costs or increase revenue, including reducing healthcare spending, cutting staff, and asking voters for property tax increases. 

The remaining recommendations focus on legislative changes, including establishing a minimum salary of $40,000 per year beginning in 2022-23 and requiring districts to spend at least 45% of state funding on teacher salaries. 

Most education funding comes from the state, and to achieve the commission’s goal, lawmakers must significantly boost how much schools receive. Indiana could generate new revenue from strategies such as reducing tax breaks and increasing income taxes, the report said. 

“The recommendations in this report are not collectively a silver bullet,” commission Chairman Michael Smith said at a briefing Monday. “Achieving competitive teacher compensation is critically important and will take everyone involved at every level working together toward that goal.”

Since 2000, Indiana has seen the largest decline in teacher pay adjusted for inflation of any state, according to the National Center on Education Statistics. Comparatively low pay makes it harder to recruit and keep teachers, especially in high-demand areas like special education. That has consequences for students, who benefit from lower teacher turnover. 

Lawmakers could use the recommendations as a blueprint to increase teacher salaries in Indiana, which has lower average pay than neighboring Midwestern states. But the political weight the governor puts behind the effort and the report’s reception from legislative leaders will determine its ultimate impact.  

“I am grateful to the commission for its dedication to developing these recommendations,” Holcomb said in a statement. “The report provides a wide range of actions for all to review and consider moving forward. The options offer a base for continuing these important conversations about making compensation for our hard-working teachers more competitive.”

Legislative leaders said they welcomed the recommendations but didn’t commit to additional funding.

The recommendations come at a time of financial uncertainty for Indiana, as the state faces the prospect of lower revenue because of the economic devastation wrought by COVID-19. As a result, lawmakers are less likely to significantly increase school funding in the upcoming two-year budget.

Greencastle math teacher Kristien Hamilton, who leads her local union and has met with lawmakers to advocate for higher teacher pay, was awaiting the report. She is glad it confirms the state is far behind in pay. But many of the suggestions for districts — such as increasing money raised from private donations — won’t make a big difference. 

“Most of us are already rubbing pennies together to try to get things done,” she said.  

When Hamilton moved from Illinois to Indiana about seven years ago, she took about a $15,000 pay cut. The average teacher in Greencastle makes about $45,000 per year, and Hamilton said her take-home pay has slowly fallen as the cost of healthcare has risen.

Hamilton is considering leaving the field and returning to her prior career as an accountant, she said. 

The report calls for school districts to raise more revenue by asking voters to approve higher  property taxes through referendums. It also recommends that lawmakers eliminate the requirement that districts seek new referendums every eight years. 

Wayne Township Superintendent Jeff Butts said that the Indianapolis district has already pursued some of the steps recommended in the report, including passing local referendums and reducing prescription costs. Average teacher pay in Wayne is the second highest in the state, and to increase it further the district would need new revenue, Butts said. 

There are other recommendations in the report Wayne considered but chose not to pursue — revealing how complex cost-cutting measures can be. For example, the commission recommends that districts limit working spouses’ participation in health care plans. But in Wayne, allowing spouses to join plans actually reduced costs because it increased the size of the pool, Butts said. 

State education funding remains substantially lower than it was before the Great Recession. When adjusted for inflation and enrollment, Indiana schools receive about 7% less from the state than they did in 2020, a gap of about $580 million, the report found. 

Chronic underfunding of the school system has put Indiana’s teacher pay behind the rest of the region, said Dan Holub, executive director of the Indiana State Teachers Association, the state’s largest teachers union.

“The state can’t solve this problem by moving money around locally or taking health insurance from educators’ spouses or retirees,” said Holub, who sat on the teacher pay commission. “The legislature has not kept up its responsibilities to fund public schools at a level necessary for compensation to be competitive.”

Despite the challenge posed by COVID-19, the legislature must act now to increase taxes and boost school funding, or it could be several years before schools get access to new revenue, Holub said. 

The report also calls for the state to send more money to districts to help educate students from low-income families. That could help high-poverty districts pay teachers more.

It recommends a cost analysis of virtual schools and programs, which are typically funded at about 85% the amount other schools receive per student, “to determine the appropriate amount of funding per student they should be receiving.”

Holcomb created the commission as teacher activism was rising around the country after West Virginia teachers went on strike for nearly two weeks. It was tasked with developing long-term strategies for addressing teacher pay in Indiana. Last fall, so many educators went to a statehouse rally for increased teacher pay that districts across the state closed because they couldn’t staff schools.

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