Indiana’s Next Level Teacher Compensation Commission offered up 37 ideas for improving teacher pay in a report released Monday. The blockbuster was buried at No. 28, labeled “state revenue increases.”
“For Indiana to become a top-three state for teacher pay in the Midwest,” the commission’s report says, “it will require hundreds of millions of additional dollars to be invested into teacher compensation.”
That means the state legislature will need to take bold action to boost revenue; in other words, raise taxes. The commission provides three suggestions: increase the state income tax rate, ask voters to approve a statewide referendum raising local property taxes or adopt a per-parcel property tax fee.
The alternative, the report makes clear, is for Indiana to continue to rank near the bottom of state — and at the very bottom among adjacent states, well below Kentucky, Illinois, Ohio and Michigan — for teacher pay and K-12 school funding. And Hoosier children will pay the price.
“Simply put, higher pay leads to better teachers,” the report says. “Not surprisingly, various studies have shown that salary increases for teaching positions improve the attractiveness of these positions. Higher pay increases the number of individuals and the overall quality of the pool of applicants, thereby improving the effectiveness of new hires.”
This should be obvious; and, indeed, teachers have been shouting it from the rooftops for years. But Indiana’s elected officials have turned a deaf ear, prioritizing tax cuts and anti-union policies.
Gov. Eric Holcomb created the teacher compensation commission to address an outcry from teachers, which led to a massive rally at the Statehouse in November 2019. The 13-member panel, made up of business leaders, state officials and educators, spent a year and a half analyzing data and research to produce an 82-page report plus 100 pages of footnotes and appendices.
It paints a compelling picture. Indiana once did a decent job of funding its schools, but that changed over the past 20 years. School funding took a serious hit when the Great Recession of 2008 hobbled the state’s economy. The economy recovered, but school funding – and teacher salaries – never did.
Remember, no one did this to Indiana. We did it to ourselves, through deliberate policy choices made by a series of governors and conservative-dominated state legislatures.
“The stagnant growth of Indiana teacher salaries has been well documented,” the report says. “In real dollars, Indiana’s average teacher salary has declined more since 2000 than any other state. In 2000, Indiana’s average teacher salary was $41,850, which was better than the national average and all but two states in the Midwest. Applying inflation to that salary would equal over $62,000 in 2019 dollars. Indiana salaries have fallen more than $10,000 behind the rate of inflation in less than two decades.
The commission concludes that Indiana needs to raise the average teacher salary to $60,000 and the minimum starting salary to $40,000. To get there, the state will need to find $600 million a year in additional revenue or cost savings. The report’s recommendations get half-way there. They include:
— $25 million from adding schools to the state’s pharmacy benefit program for employees.
— $50 million from dropping teacher spouses from school insurance if they have access to health coverage from other employment.
— $80 million from increasing the number of local school corporations where voters approve property-tax increases to fund school operations.
— $50 million from using future state reserves to pay down debt in a teacher retirement fund.
— $50 million from cutting back Indiana’s extraordinarily generous 529 college-savings plan, which disproportionately benefits wealthy taxpayers.
— Approximately $50 million from numerous other provisions, many of them focused on improving the efficiency of school operations.
The other $300 million a year will need to come from legislature-approved revenue increases, the commission indicated. If not this year, then soon. At a Monday news conference accompanying the report’s release, commission chairman Michael L. Smith, a former top executive at Mayflower Group and Anthem Inc., called for an all-hands-on-deck effort involving legislators, teachers, taxpayers, businesses and others.
“It’s going to take action and cooperation by all of us,” he said.
But some of the panel’s ideas are sure to face pushback. Lawmakers, committed to touting Indiana as a low-tax state, will hesitate to increase revenues, especially with the economy suffering from the COVID-19 pandemic. Teachers will balk at giving up benefits or outsourcing services to improve efficiency, Indiana State Teachers Association officials suggested Monday.
Personally, I’m disappointed the commission brushed off the impact of Indiana’s dramatic growth in private-school vouchers and charter schools. The report accepts the claim that, if students weren’t receiving vouchers, they would be attending public schools, at greater cost to the state. In fact, many of those students would be in private schools with or without state-funded vouchers.
But the important thing is that the commission made an open-and-shut case that anemic school funding and abysmal teacher pay have created a crisis in Indiana. It’s up to the governor and the General Assembly to do their part, and soon.