Financial Lessons Learned in La. Merit-Pay Measure Shared

Associate Editor

Kissimmee, Fla.

School business officials in Louisiana who struggled to craft “pay-for-performance” salary schedules for teachers in their districts, based on a law approved by state legislators, shared lessons learned from those struggles this weekend. 

The session, part of the Association of School Business Officials International conference here, focused not just on the impact of the law, but also on the Louisiana officials’ recommendations for their colleagues in other states faced with trying to manage similar changes in educator salary schedules based on implementing a pay-for-performance system.

The measure was passed as part of a broad series of education policy changes championed by Gov. Bobby Jindal in 2012. The so-called “talent statute,” Act 1, required educators’ salary structure to include a merit-pay component tied to the state’s teacher-evaluation system, which scores teachers based on evaluations by school principals and the performance of students on high-stakes tests. 

In addition to overhauling their salary systems, the business officials were challenged to keep the impact of salary adjustments “expense neutral,” because districts (known as “parishes” in Louisiana) couldn’t afford anything more, said Bill Hebert, the director of finance for the Jefferson Davis Parish Schools. “How could we do that?” For district officials, the question is whether “the salary formula designed [is] going to be sustainable,” said Hebert. 

In fact, the law resulted in many parishes spending beyond what had been budgeted for stipends. The St. Charles Parish Schools, for instance, had projected spending $150,000 on merit stipends, but the actual cost was $400,000 in 2013-14, according to Jim Melohn, the chief financial officer and legislative liaison for the district.

The Louisiana education department originally had estimated that 10 percent of teachers would be rated “highly effective,” but after new salary schedules had already been adopted, the revised projection was 20 percent, Melohn said. The department also added principal flexibility to upgrade a larger number of teachers from “effective emerging” status to “effective proficient,” according to Melohn, a move that also fueled increased spending.

To move away from the traditional salary schedule structure, which granted pay increases for steps based on years of experience and advanced degrees attained, a group of 13 school business officials from different parishes begain meeting to see how they could make a new, workable plan. They called themselves “The Armadillo Team,” a joking reference to their concern about “getting run over” under the pressure of trying to sort out the impact of the law on their schools.

Under the law, salary schedules established for teachers, administrators, and other certified school personnel are now based on three factors (none of those factors alone can account for more than 50 percent of the formula used to compute employees’ salaries): 

  • Effectivenesss, as determined by the performance evaluation program;
  • Demand, which includes certification, a particular school’s need, geographic area, and subject area, which may include advanced degree levels; and
  • Experience.

This quickly became the most difficult part of the law for business officials to interpret, because of the wording around percentages. “The stipulation that the pay tied to one particular criterion cannot exceed 50 percent of the pay of all three criteria combined. What exactly did that mean?” asked Hebert.

The team of business officials also struggled with these aspects of the legislation:

  • The state law prevented school districts from lowering anyone’s pay, which made it more difficult to totally redesign the teacher pay system.
  • Legal counsel in local school districts had different interpretations about which employees were subject to the provisions of the law; some said the whole school system was covered.
  • Louisiana Board of Secondary and Elementary Education officials “were adamant” that salary increases should not be tied automatically to the possession of an advanced teaching degree.

Everyone agreed, and understood, that the law intended for teachers deemed “ineffective” to have their salaries frozen.

The lessons learned outlined by Hebert and Melohn, included:

  • As a positive, long-existing inequities between pay grades that had become embedded into the existing salary schedules could be addressed with a new salary structure.
  • Teachers who performed at higher levels on Louisiana’s Compass evaluation systemthe state’s educator support and evaluation system, received higher annual increases or stipends, which was the intended outcome of the law.
  • However, the new salary formulas were difficult for school administrators to explain to employees within their schools.
  • Costs in the first year exceeded projections because of changes in the formula for evaluation.

School business officials also face a broader unknown with the teacher-evalution law: whether it will remain on the books. The Louisiana Supreme Court is hearing a lawsuit challenge about whether the measure adheres to the state’s constitution.

In the end, Hebert said, “everything we did could be considered null and void.” 

One thought on “Financial Lessons Learned in La. Merit-Pay Measure Shared

  1. not surprising; very few, if any, big programs work perfectly upon implementation; reading between the lines of this article, it seems as if the policy was implemented without much state guidance, not to mention poorly written–‘…"What exactly did that mean?" asked Hebert.’

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