Education

$5,000 pay raise an indirect bailout of mismanaged schools?

September 22, 2022

Ray Carter

Members of the Oklahoma State Board of Education have approved a budget request developed by State Superintendent of Public Instruction Joy Hofmeister that calls for giving teachers another $5,000 raise on top of the $7,200 in combined average raises provided since 2018.

Although Hofmeister claimed the pay increase is needed to keep Oklahoma regionally competitive, comments from an official with one of the state’s largest school districts suggests the plan may ultimately be an indirect bailout for schools that mismanaged federal COVID-bailout funds.

During the board meeting, Stacey Wooley, chair of the school board for Tulsa Public Schools, urged board members to approve the budget request to help her district maintain existing pay rates.

“Tulsa Public Schools delivered compensation packages to teachers and support staff that were the equivalent of 7-to-11 percent increases from last year,” Wooley said.

How did Tulsa afford those pay raises?

“Mostly, we did it with federal money,” Wooley said. “Federal money is standing between teachers and support staff losing 7 percent for doing the hardest job in America, and that federal money isn’t a permanent solution.”

If state funding to Tulsa is not increased enough to offset the loss of one-time federal COVID-bailout funds, Wooley indicated the district would face financial challenges.

National experts have warned that schools may be creating avoidable financial problems by using one-time federal COVID funds for ongoing expenses.

During a recent webinar, Marguerite Roza, director of the Edunomics Lab at Georgetown University, said many schools nationwide could face a financial “bloodletting” once one-time federal COVID-bailout funds run out in the 2024-2025 school year.

Roza said the districts “most at risk” are those that used federal COVID-bailout funds “for recurring financial commitments.”

“We make these commitments. The money, the revenue source, runs out,” Roza said. “But the commitments continue on.”

Hofmeister Plan Ignores Cost-of-Living Differences

Hofmeister announced her teacher-pay plan via a press release issued three days before the state board meeting.

In her release, Hofmeister claimed that Oklahoma’s average teacher pay had fallen to fourth in a seven-state region, saying Oklahoma currently pays teachers an average annual salary of $54,096, trailing New Mexico ($54,256), Texas ($57,090), and Colorado ($57,706).

But those figures are misleading at best.

A report released last December by the Legislative Office of Fiscal Transparency (LOFT) found that Oklahoma’s average teacher pay ranked first in the region and 21st in the nation in 2019 after accounting for cost-of-living differences, benefits, and tax burden.

The LOFT report showed that Oklahoma trailed neighboring Colorado and Texas when officials looked only at raw salary figures, but once those numbers were adjusted for actual purchasing power, Oklahoma leaped both states.

The same dynamic remains in effect today.

While raw average teacher compensation in Colorado has increased by a little under $3,000 since 2019, according to the figure cited by Hofmeister, the data in the LOFT report suggests the actual purchasing power of the average Colorado teacher’s salary is equivalent to $51,306 today. That means Colorado teachers are still paid less, on average, than Oklahoma teachers. The LOFT report showed that Oklahoma teachers’ average salaries provided the national equivalent of $55,161 in real buying power after accounting for cost-of-living differences in 2019.

The same thing holds true for Texas. Although Hofmeister said the average teacher salary in that state is now $57,090, the data in the LOFT report indicates that figure translates into $54,427 in real purchasing power, which is lower than the buying power of the average Oklahoma teacher’s salary in 2019.

Of the states bordering Oklahoma, only New Mexico appears to pay more to its teachers than Oklahoma after accounting for cost-of-living differences, benefits, and tax burden. Based on LOFT report data and the salary figure cited by Hofmeister, New Mexico has increased its raw average teacher salary by $6,394 since 2019 and lawmakers in that state recently approved another $10,000 hike, which will boost its raw teacher salary to $64,256. (The real purchasing power of New Mexico salaries is almost the same as the raw figure, based on LOFT data.)

Carolyn Thompson, deputy chief of staff and chief of government affairs for the Oklahoma State Department of Education (OSDE), acknowledged that the OSDE did not account for measures of true purchasing power when drafting the proposal.

“This does not take into account any cost of living,” Thompson said.

Board members noted that made the salary comparisons flawed.

“I think we all agree that we want to be competitive with teacher pay, but it’s obviously—at least in some places—more expensive to live in Colorado,” said state board member Jennifer Monies.

Thompson also indicated that teacher pay in much of Colorado may be lower than the statewide average cited by Hofmeister, which Thompson said was driven up primarily by recent pay raises given to teachers in high-cost Denver.

Past Oklahoma Pay Raises Did Not Have Hoped-For Impact

When Oklahoma state lawmakers approved a raft of major tax increases in 2018 to provide $6,100 in pay raises per teacher, legislators predicted the pay increase would prompt more people to enter the teaching profession.

And teacher numbers did increase the following two years, but data reviewed during the state board meeting suggest that increase was due more to delayed retirements than new entrants into the profession.

Following the $6,100 teacher pay raise in 2018 and the $1,200 average pay raise in 2019, the number of teachers in Oklahoma schools increased by 1,751 to a total of 43,056 in the 2019-2020 school year.

Teacher numbers have declined since that time to 42,551.

OSDE officials attribute much of the initial increase, as well as a significant share of the subsequent decline in teacher numbers, to the fact that many near-retirement teachers simply delayed their exit from the profession for a few years to increase their state retirement benefits.

“Their retirement benefit is calculated on the salary of their last three years,” Thompson said. “So (if) they stayed in three more years, their retirement benefit would increase because they received a—what is that?—$7,300 pay raise. And so it was worth it to many teachers to stay in the classroom, and I think we see that reflected in the numbers. But we have now reached the three-year mark, and so we have begun to see a decline. So teachers have gotten the maximum benefit that they would get in retirement from the pay raises, and then many are retiring.”

She said 1,973 teachers retired at the end of the 2021-2022 school year.

That any increase in teacher numbers was mostly a byproduct of short-term efforts to boost retirement benefits has long been anticipated.

During the December 2019 meeting of the State Board of Education, Thompson warned board members that the surge in teacher numbers might be short-lived because it was tied to retirement planning, saying, “We have a cliff coming, kind of, in three years down the road from the teacher pay raise.”

Despite constant complaints of a teacher shortage, state data shows that there are still 2,831 more public school teachers in Oklahoma than there were a decade ago, and the student-teacher ratio today is lower than it was in 2012. Teacher numbers increased 7 percent during the decade, while the number of students enrolled grew just 4.2 percent.

Student enrollment in Oklahoma public schools topped off at 703,650 in the 2019-2020 school year but fell the following year amidst COVID. Although enrollment has increased slightly since the 2020-2021 school year, Thompson told board members that enrollment has “not recovered fully” from the pandemic drop-off.

Overall, there are about 87,000 employees in Oklahoma public schools, with less than half being teachers.