Addressing the Teacher Labor Market Challenge Executive Summary - - PowerPoint PPT Presentation

Arizona State Funding Project: Addressing the Teacher Labor Market Challenge Executive Summary

Research conducted by Education Resource Strategies

Key y fin findin ings

• 1. Student outcomes in Arizona lag behind the rest of the nation.
• 2. Arizona struggles to attract and retain a strong and effective teacher

workforce.

• 3. Low teacher salaries are a primary challenge leading to this unhealthy

teacher labor market.

• 4. Arizona per pupil funding and state commitment to K-12 funding is low

and declining.

• 5. Addressing the teacher workforce challenge will require new and

strategic investments.

• 6. Arizona districts may have some limited opportunities to shift current

spending, but the state will need to generate additional revenue for teacher salary investments.

2

Student outcomes in in Ariz izona la lag behind the rest of the nation

Key Findings

Ariz rizona stu tudents have mad ade so some recent gain ains on th the NAEP as assessment in in readin ing

4

Source: “Funding PreK-12 Education,” 110th Arizona Town Hall Final Report

Bu But t overall ll Ariz rizona perf rformance remain ins at t th the bottom end of f all all states

• n th

the recent NAEP as assessment

5

Source: ERS analysis based on NAEP Data Explorer

207 215 235 190 195 200 205 210 215 220 225 230 235 240 New Mexico Alaska California Nevada Mississippi Arizona Hawaii West Virginia Louisiana Michigan Alabama South Carolina Arkansas Texas Tennessee South Dakota Oregon Kansas Illinois Idaho Georgia Oklahoma Maryland Minnesota Wisconsin Missouri New York Delaware Maine Colorado Iowa Ohio North Dakota Montana Rhode Island Utah North Carolina Washington Pennsylvania Nebraska Indiana Florida Wyoming Kentucky Connecticut New Jersey Virginia Vermont New Hampshire Massachusetts

Average Scale Score

2015 NAEP Average Scale Score, 4th Grade Reading

National average = 223

…where it has been for over a decade

6

Source: ERS analysis based on NAEP Data Explorer; NAEP reading rank based on average scale score

209 207 210 210 212 213 215 218 219 221 221 221 222 223 190 195 200 205 210 215 220 225 230 235 240 2003 2005 2007 2009 2011 2013 2015

Average scale score

2015 NAEP Average Scale Score, 4th Grade Reading, Arizona vs. U.S., 2003-2015

Arizona U.S.

Arizona NAEP 4th grade reading rank

43/50 47/50 47/50 47/50 45/50 45/50 44/50

Ariz izona strugg ggles to attract and retain a strong and effective teacher workforce

Key Findings

However, as as a a resu sult lt of f high tu turnover an and attrit itio ion, Ariz rizona stu tudents ar are unlik likely ly to have a a high ighly ly effecti tive teac acher th three year ars in in a a row

8

Research shows that teachers become more effective in producing student achievement gains after the first two years of teaching, with continued increases in gains as experience increases. Additionally, research shows that teachers without certification are significantly less likely to produce gains in student achievement.

Source: ERS analysis using data from “A coming crisis in teaching? Teacher supply, demand, and shortages in the U.S.,” Learning Policy Institute; NCES Full-Time Equivalent (FTE) Teachers [State] 2014-15; “Finding and Keeping Educators for Arizona’s Classrooms,” Morrison Institute for Public Policy 2017;“Superintendent Annual Financial Report FY17; Does Teacher Preparation Matter? Evidence about Teacher Certification, Teach for America, and Teacher Effectiveness,” Linda Darling Hammond, Deborah J. Holtzman, Su Jin Gatlin & Julian Vasquez Heilig, 2005; “Does teaching experience increase teacher effectiveness? A review of the research,” Learning Policy Institute 2016

Likelihood of student assignment to a novice or uncredentialled teacher in Arizona Year 1 Year 2 Year 3 Student

A B C E G H I D F J

Novice/uncredentialled teacher or long-term sub

Ariz izona teachers le leave th the teachin ing profession at t th the hig ighest rate in in th the countr try, , nearly ly 3x x hig igher th than th the natio tional media ian

9 3% 19% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Massachusetts Ohio Pennsylvania Arkansas California Illinois Georgia North Carolina Oklahoma Missouri Connecticut Colorado Florida Alabama Iowa Washington Virginia Kansas New York New Jersey Indiana Louisiana Michigan Minnesota Wisconsin South Carolina Kentucky Texas Arizona

Rate of Teacher Attrition (Leavers) 2013

Source: ERS analysis using data from “A coming crisis in teaching? Teacher supply, demand, and shortages in the U.S.”, Learning Policy Institute 2016. Note: data is only available for 29 states

National median = 7%

Co Consid iderin ing all all teac achers who leave th their sc schools ls, , AZ Z has as th the highest tu turn rnover in in th the U.S., .S., with ith close lose to a a quarter of f teachers lea leavin ing th their ir sc schools ls an annually lly, nearly ly double th the natio ional l media ian of f 14%

10 7% 24% 0% 5% 10% 15% 20% 25% 30% Rhode Island Utah West Virginia New Jersey Pennsylvania Illinois New Hampshire Washington Vermont Maine Nebraska Wyoming California Connecticut New York Maryland Oregon South Dakota Michigan Georgia Ohio Idaho Tennessee Iowa Massachusetts Arkansas Alabama Missouri Florida North Dakota Virginia Colorado Kansas Indiana Kentucky Minnesota Wisconsin Alaska South Carolina Delaware Mississippi North Carolina Oklahoma Montana Nevada Hawaii Texas Louisiana New Mexico Arizona

Rate of Teacher Turnover (Movers & Leavers) 2013

Source: ERS analysis using data from “A coming crisis in teaching? Teacher supply, demand, and shortages in the U.S.”, Learning Policy Institute 2016; “Finding and Keeping Educators for Arizona’s Classrooms,” Morrison Institute for Public Policy 2017

National median = 14%

Data from the Arizona Department of Education shows that since 2013, 42%

• f Arizona teachers left

within 3 years of being

• hired. 22% of the teachers

hired from 2013-2015 lasted only one year.

Ariz rizona is s in th the bottom fiv five of f all all states for r percent of f teac achers with thin in th their ir fir first tw two year ars in in th the clas lassroom

11 29% 15% 6% 0% 5% 10% 15% 20% 25% 30% 35% Florida Colorado Utah Indiana Arizona Wisconsin Hawaii Idaho Nevada New Mexico Texas Maryland Massachusetts Nebraska Wyoming Mississippi Oklahoma Louisiana Kansas North Dakota North Carolina Arkansas Illinois South Dakota Missouri South Carolina Alabama West Virginia Montana Delaware Minnesota New Jersey Alaska Virginia Kentucky Ohio Tennessee Oregon Iowa Michigan Maine California Vermont Connecticut New York Pennsylvania Washington Rhode Island New Hampshire Georgia

Percent Novice Teachers, 2013-14

Source: ERS analysis using data from “A coming crisis in teaching? Teacher supply, demand, and shortages in the U.S.”, Learning Policy Institute 2016; “Does teaching experience increase teacher effectiveness? A review of the research”, Learning Policy Institute 2016

National median = 12%

High turnover and attrition means more inexperienced

• teachers. But research shows that teachers become more

effective in producing student achievement gains after the first two years of teaching, with continued increases in gains as experience increases.

High tu turnover r an and attrit itio ion in Ariz rizona contr trib ibutes to th the impact of f th the

• ngoin

ing (n (natio ional) l) teacher sh shortage

12 4 5 1 2 3 4 5 6 Washington Vermont Utah Texas Pennsylvania Oregon North Carolina New York New Jersey Mississippi Michigan Maine Kansas Iowa Indiana Illinois Georgia Connecticut New Mexico New Hampshire Massachusetts Kentucky Hawaii Florida Delaware Colorado Arkansas Alaska Wisconsin Tennessee Montana Missouri Minnesota California Alabama Wyoming Virginia South Dakota South Carolina Rhode Island Ohio North Dakota Nebraska Maryland West Virginia Arizona Oklahoma Nevada Louisiana Idaho

Count of Statewide Teacher Shortages in Easiest to Staff Areas (2017-18)

Source: ERS analysis using data from U.S. Department of Education Teacher Shortage Areas Nationwide Listing June 2017; “Finding and Keeping Educators for Arizona’s Classrooms,” Morrison Institute for Public Policy 2017; ‘Easiest to staff” areas are defined here as the arts, early childhood, elementary education (general), English language arts, Social studies/humanities; For AK 2016-17 is most recent year of data

National median = 1

Arizona reports more teacher shortages in “easy to staff areas” than all but four states. In a recent survey, 81% of administrators reported difficulty hiring new teachers.

Low teacher sala laries are a primary ry challenge le leading to this unhealthy teacher la labor market

Key Findings

Jus Just si since th the 2008 recessio ion, real al infl flatio ion-adju justed teacher sa sala lari ries in in Ariz rizona have declin lined 10%, more th than in in all all but 5 states

14

• 16%
• 10%

10%

• 20%
• 15%
• 10%
• 5%

0% 5% 10% 15% Mississippi Colorado Oklahoma Illinois West Virginia Arizona Indiana Ohio Virginia Washington Louisiana South Carolina Idaho New Mexico Alabama Georgia Kansas Utah Arkansas Maryland Tennessee Hawaii Wyoming Delaware Kentucky Florida North Carolina Missouri New Jersey Wisconsin Michigan Texas Minnesota South Dakota Maine New York New Hampshire Pennsylvania Nevada Rhode Island Oregon Iowa Massachusetts Montana Connecticut Nebraska Alaska California North Dakota Vermont

Percent Change in Inflation-Adjusted Teacher Salaries, 2009-10 to 2016-17

Source: ERS analysis based on NCES Table 211.60 Estimated average annual salary of teachers in public elementary and secondary schools, by state: Selected years, 1969-70 through 2016-17

National median = -6%

Reac achin ing th the point where Ariz rizona now has th the si sixt xth-lo lowest teacher sa sala lary ry in in th the U.S. .S.

15

Source: ERS analysis based on NCES Table 211.60 Estimated average annual salary of teachers in public elementary and secondary schools, by state: Selected years, 1969-70 through 2015-16; NCES Comparable Wage Index

In a recent survey, more than 80% of AZ teachers reported increased pay as the top way to attract new teachers, with a similar percentage reporting low pay as the main reason teachers leave the profession

$43K $47K $65K $- $10,000.00 $20,000.00 $30,000.00 $40,000.00 $50,000.00 $60,000.00 $70,000.00 $80,000.00 Virginia Colorado Mississippi Texas Utah Arizona Oklahoma New Mexico Washington North Carolina Tennessee West Virginia Florida South Dakota Alabama South Carolina Louisiana Missouri Georgia Kansas North Dakota Nevada Idaho Arkansas Indiana Kentucky Wisconsin Delaware Illinois Hawaii Maine Ohio Minnesota New Hampshire Maryland New Jersey Nebraska Montana Wyoming Rhode Island Iowa Pennsylvania Oregon Connecticut Vermont Michigan New York Alaska California Massachusetts

Average Teacher Salary, 2016-17, Adjusted for Geography

National median = $55K

Th The average teacher sa sala lary ry in Ariz rizona is s 19% less th than what is s requir ired for r a a fam amily ily li livi ving wag age in in th the state, th the th thir ird lar largest gap ap in in th the natio ion

16

• 25%
• 19%

25%

• 30%
• 20%
• 10%

0% 10% 20% 30% Colorado Virginia Arizona South Dakota Hawaii Utah Mississippi Oklahoma New Mexico Idaho Florida Missouri West Virginia Washington Montana Kansas South Carolina Maine North Carolina Alabama Louisiana Arkansas Indiana Tennessee North Dakota Nebraska Texas Kentucky Minnesota Georgia New Hampshire Wisconsin Oregon Nevada Maryland Delaware Vermont Illinois Iowa Wyoming New Jersey Ohio Alaska California Rhode Island Michigan Connecticut New York Pennsylvania Massachusetts

Gap From Average Teacher Salary to Family Living Wage, 2017

National median = -3.9%

Source: ERS analysis based on NCES Table 211.60 Estimated average annual salary of teachers in public elementary and secondary schools, by state: Selected years, 1969-70 through 2016-17; MIT Living Wage Calculator; Analysis compares average teacher salary for each state in 2016-17 to family living wage

Based on the MIT Living Wage calculator, the family living wage is defined here as the minimum income needed to cover the basic needs and all relevant taxes for a family with one working adult, based on local costs. To reach the family living wage in the state, average teacher salaries in AZ would need to increase by 23%

Teachers in Ariz rizona with th 10 year ars of f exp xperie ience who head fam amili ilies of f four r qualify lify for r th the most t public lic as assis istance programs of f all all states

17 7 1 2 3 4 5 6 7 8 Louisiana California Delaware Alaska Wyoming Michigan Rhode Island North Carolina New Mexico New Hampshire Nevada New Jersey Illinois Pennsylvania Maryland Oregon Vermont Kentucky Connecticut Ohio Massachusetts Texas Mississippi Tennessee Wisconsin Indiana Virginia West Virginia Idaho Kansas Nebraska Missouri Alabama South Carolina Iowa Georgia Arkansas Utah Washington New York Florida Oklahoma South Dakota Montana Maine Colorado North Dakota Minnesota Arizona

Source: ERS analysis based on data from “Mid- and Late-Career Teachers Struggle With Paltry Incomes,” Center for American Progress (July 2014); NCES Table 211.40 Average base salary for full-time public elementary and secondary school teachers with a master's degree as their highest degree, by years of full-time teaching experience and state: Selected years, 1993-94 through 2011-12; Arizona Department of Economic Security; Arizona Department of Education School District Employee Report. Data not available for Hawaii; Analysis of TEFAP eligibility based on AZ DoE School District Employee Report of statewide distribution of teacher experience and uses average teacher salaries from 2011-12 (adjusted for inflation to 2016-17 dollars) for teachers with Master’s degrees and experience ranges of ≤ 5 years, 6-10 years, and 11-20 years

National median = 5

If they head four-person households, more than half of teachers in Arizona would qualify for The Emergency Food Assistance Program (TEFAP). The Number of Benefit Programs For Which Teachers With Bachelor’s Plus 10 Years’ Experience Qualify If They Head a Family of Four, 2014

Ariz rizona teac achers cite pay as as th the main ain reason for r leavin ing th the professio ion in far ar greater rates th than th the natio ional l average

18

Source: ERS analysis based on data from “Finding and Keeping Educators for Arizona’s Classrooms,” Morrison Institute for Public Policy 2017 ; NCES Table 5. Percentage distribution of public school teacher leavers who left teaching involuntarily or who rated various reasons as the most important in their decision to leave the position of a K–12 teacher: 2012–13, (based on data from U.S. Department of Education, National Center for Education Statistics, Teacher Follow-up Survey (TFS), "Former Teacher Data File," 2012-13)

80%

<10%

In a recent survey, more than 80%

• f Arizona teachers reported low

pay as the main reason they leave the profession, with a similar percentage reporting increased pay as the top way to attract new

• teachers. In contrast, in a national

survey, less than 10% of teachers who voluntarily left the profession cited salary or other benefits as their reason for leaving.

United States Arizona

Ariz izona per pupil funding and state commit itment to K-12 funding is is lo low and declining

Key Findings

While le Ariz rizona per-pupil il fu fundin ing was once clo lose se to th the natio ional l media ian, , th the gap ap has as grown sig signif ific icantly ly in in recent year ars

20 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 1990-91 1994-95 1998-99 2002-03 2006-07 2010-11 2014-15

Per pupil revenue in 2014-15 dollars

Arizona Per-Pupil Revenue Compared to National Median, Selected Years 1989-90 to 2014-15

National median Arizona

Source: ERS analysis based on NCES Revenue per pupil by source 1987-88 through 2013-14; NCES Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2014–15 (Fiscal Year 2015) ; NCES Comparable Wage Index, Bureau of Labor Statistics Inflation Index

AZ funding rank

33/50 24/50 44/50 36/50 43/50 44/50 47/50

Ariz rizona stu tudents ar are fu funded at t 71% of f th the natio ional l media ian an and only y 42%

• f

f th the high ighest fu funded state

21

$8,094 $8,995 $21,589

$0 $5,000 $10,000 $15,000 $20,000 $25,000

Utah North Carolina Idaho Arizona Nevada Texas Tennessee Oklahoma Florida California Mississippi Georgia Alabama Virginia Colorado Kentucky Washington New Mexico Arkansas Illinois South Carolina Indiana Missouri South Dakota Louisiana Oregon Wisconsin Michigan Kansas West Virginia Iowa Minnesota Ohio Maryland Delaware Hawaii Montana Nebraska North Dakota Massachusetts Rhode Island Pennsylvania New Hampshire Maine New Jersey Connecticut New York Alaska Wyoming Vermont

Total K12 Per-Pupil Revenue, 2014-15, Adjusted for Geography

Source: ERS analysis based on NCES Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2014–15 (Fiscal Year 2015); NCES Comparable Wage Index; “Funding PreK-12 Education,” 110th Arizona Town Hall Final Report; Arizona Joint Legislative Budget Committee Non-Capital Funding Report August 2017

National median = $12,651

This includes funds raised from Prop 301, passed in 2000 to increase education revenue, which contributed $492M ($453 per pupil) in FY15 and $547M (or $495 per pupil) in FY17.

In Infl flatio ion-adju justed per-pupil il fu fundin ing in in Ariz rizona has actu tuall lly declin lined 12% in in recent year ars, , more so so th than all all but one state

22

• 19%
• 12%

15%

• 25%
• 20%
• 15%
• 10%
• 5%

0% 5% 10% 15% 20% Indiana Arizona Idaho Nevada Florida Illinois Wisconsin Arkansas North Carolina Georgia South Dakota Utah Nebraska Mississippi Colorado Alabama Virginia West Virginia Texas Hawaii New Mexico Oklahoma Louisiana Maryland Wyoming Kentucky Michigan Missouri Tennessee Maine Kansas South Carolina Montana Delaware New Jersey Ohio Rhode Island Washington Massachusetts New York Minnesota North Dakota Vermont Pennsylvania Iowa New Hampshire California Oregon Connecticut Alaska

Percent Change in Real Inflation-Adjusted Dollar Per Pupil Revenue, 2009-10 to 2014-15

Source: ERS analysis using data from NCES Revenue per pupil by source 1987-88 through 2013-14; NCES Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2014–15 (Fiscal Year 2015); Bureau of Labor Statistics

National median = -2%

Prop 123 an and Resu sult lts-Based Fundin ing together result lt in in an addit itio ional l $330M an annually lly, or r $298 per r pupil, il, which ich still till lea leaves Ariz rizona in investin ing less ss per r pupil il th than most states

23 $0 $5,000 $10,000 $15,000 $20,000 $25,000 Utah North Carolina Idaho Nevada Arizona Texas Tennessee Oklahoma Florida California Mississippi Georgia Alabama Virginia Colorado Kentucky Washington New Mexico Arkansas Illinois South Carolina Indiana Missouri South Dakota Louisiana Oregon Wisconsin Michigan Kansas West Virginia Iowa Minnesota Ohio Maryland Delaware Hawaii Montana Nebraska North Dakota Massachusetts Rhode Island Pennsylvania New Hampshire Maine New Jersey Connecticut New York Alaska Wyoming Vermont

Total K12 Per Pupil Revenue, 2014-15, Adjusted for Geography

Additional per-pupil revenue generated from Prop 123 and Results-Based Funding

Source: ERS analysis based on NCES Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2014–15 (Fiscal Year 2015); NCES Comparable Wage Index; “Funding PreK-12 Education,” 110th Arizona Town Hall Final Report; Arizona Joint Legislative Budget Committee Non-Capital Funding Report August 2017.; Arizona Department of Education FY 2018 Results-Based Funding Allocation File; Uses estimated FY17 student enrollment from JLBC report of 1,104,753

National median = $12,651

While some of this additional revenue has been targeted for teacher compensation, this amount isn’t enough to address the labor market challenge.

2.7% 2.9% 3.3% 3.4% 3.5% 4.0% 0% 1% 2% 3% 4% 5% Florida Arizona Alabama Kentucky Montana South Carolina

State and Local K-12 Revenue as Percent of State GDP, 2014-15

St State effort rt for r K-12 in in Ariz rizona is is lo low, , even when compared with ith a group

• f

f conservativ ive states with ith sim simila ilar weal alth

24

National median = 3.3%

Per-pupil revenue 2014-15 (adjusted for geography)

$9,857 $8,995 $10,293 $11,373 $14,497 $12,207

K-12 revenue per taxpayer 2014-15

$2,451 $2,975 $3,214 $3,454 $3,181 $3,704

Per capita GDP 2016

$39,543 $38,590 $37,261 $37,261 $38,985 $37,063

Change in per capita GDP 2009-2016

2.1% 2.0% 5.7% 7.5% 8.4% 6.1%

Source: ERS analysis based on data from NCES Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2014–15 (Fiscal Year 2015); NCES Comparable Wage Index; Internal Revenue Service; Bureau of Economic Analysis, Gallup Ideology by State 2016

Every ry state th that is s poorer, , invests more—and sp spends more of f th their ir GDP—

• n K-12 educatio

ion

25

Per-pupil revenue 2014-15 (adjusted for geography)

$8,995 $8,870 $10,293 $10,036 $12,015 $12,207 $13,531

K-12 revenue per taxpayer 2014-15

$2,975 $2,825 $3,214 $3,116 $3,803 $3,704 $4,050

Per capita GDP 2016

$38,590 $35,466 $37,261 $31,881 $36,368 $37,063 $36,315

Change in per capita GDP 2009-2016

2.0% 4.0% 5.7% 1.4% 7.9% 6.1% 4.9%

2.9% 3.1% 3.3% 3.6% 3.9% 4.0% 4.3% 0% 1% 2% 3% 4% 5% Arizona Idaho Alabama Mississippi Arkansas South Carolina West Virginia

State and Local K-12 Revenue as Percent of State GDP, 2014-15

National median = 3.3%

Source: ERS analysis based on data from NCES Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2014–15 (Fiscal Year 2015); NCES Comparable Wage Index; Internal Revenue Service; Bureau of Economic Analysis, Gallup Ideology by State 2016

St State commitment to educatio ion fu fundin ing in Ariz rizona has lagg agged th the natio ion sin since 1990 an and is is at t one of f th the lo lowest poin ints of f th the las last th three decades

26

Source: ERS analysis using data from NCES Revenue per pupil by source 1987-88 through 2013-14; NCES Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2014–15 (Fiscal Year 2015); Bureau of Economic Analysis

2.7% 3.6% 3.5% 3.6% 3.5% 3.4% 3.3% 3.2% 3.8% 3.1% 2.9% 3.4% 3.3% 3.2% 2.9% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

State and Local K-12 Revenue as Percent of State GDP, 1986-87 to 2014-15

National median Arizona

Addressing the teacher workforce challenge will ill require new and strategic in investments

Key Findings

Cu Curr rrently ly, , it t tak akes th the average Ariz rizona teac acher more th than 25 year ars jus just to ear arn a a fam amily ily li livi ving wag age

28

Source: ERS analysis based on NCES Schools and Staffing Survey Public Teachers and District Data Files 2011-12; Arizona Department of Education Teacher Experience Report FY17; Superintendent Annual Financial Report FY17; Expect More Arizona Progress Meter; Bureau of Labor Statistics Inflation Index; MIT Living Wage Calculator; US Census Bureau; Pew Research Center. This analysis uses average salaries based on teacher experience from 2011-12, adjusted for inflation to 2016-17 dollars. Due to data availability, salary data beyond year 14 is estimated based on the reported 15+ year average and reported maximum salary.

$35.5K $57.1K $0 $20,000 $40,000 $60,000 $80,000 1-2 3-4 5-6 7-8 9-10 11-12 13-14 15-16 17-18 19-20 21-22 23-24 25-26 27-28 29-30 Maximum salary

Teacher Years of Experience

Calculated Average Teacher Salary by Years of Experience, 2016-17

Family living wage 2017: $58.2K National median teacher salary 2017: $54.7K Calculated AZ teacher salary trajectory 2017

• Gov. Ducey proposed 20% salary increase 2018

Enablin ling teac achers to reac ach th the fam amily ily livin ving wag age by y mid-career would ld cost t ab about $900M-$1.1B annuall lly

29

Source: ERS analysis based on NCES Schools and Staffing Survey Public Teachers and District Data Files 2011-12; Arizona Department of Education Teacher Experience Report FY17; Superintendent Annual Financial Report FY17; Expect More Arizona Progress Meter; Bureau of Labor Statistics Inflation Index; MIT Living Wage Calculator; US Census Bureau; Pew Research Center. This analysis uses average salaries based on teacher experience from 2011-12, adjusted for inflation to 2016-17 dollars. Due to data availability, salary data beyond year 14 is estimated based on the reported 15+ year average and reported maximum salary. Total investment based on 2016-17 teacher FTE for both district and charter; includes estimated teacher salary investment of ~$745M-$893M and benefits investment of ~$149M-$179M (assumes 20% benefits rate excluding fixed costs of health, dental, and life insurance, based on data from Arizona School Boards Association)

$35.5K $57.1K $48.2K $77.5K

$0 $20,000 $40,000 $60,000 $80,000 1-2 3-4 5-6 7-8 9-10 11-12 13-14 15-16 17-18 19-20 21-22 23-24 25-26 27-28 29-30 Maximum salary

Teacher Years of Experience

Calculated Average Teacher Salary by Years of Experience, 2016-17

Family living wage 2017: $58.2K National median teacher salary 2017: $54.7K Calculated AZ teacher salary trajectory 2017 Proposed increase to reach family living wage in 11-12 years

Improving compensation should lead to improved retention, which will add additional costs

• ver time as more

teachers stay in the system.

• Gov. Ducey proposed 20% salary increase 2018

Bu But t Ariz rizona can annot afford to fu funnel l so so man any reso sources into an an outdated system th that does s not t attract an and retain in th the best teac achers or r inc incentiv iviz ize teac achers to improve an and contr trib ibute

30

Goals and Principles of a Strategic Teacher Compensation System

Source: “Misfit Structures & Lost Opportunities,” Education Resource Strategies (2013)

Ariz rizona distric icts could use se th that $900M-$1.1B in investment to fr frontl tload pay rai aises to help lp teac achers reac ach th the fam amily ily li livi ving wag age so sooner an and minim inimiz ize th the high rates of f attrit itio ion for r new teachers

31

$35.5K $57.1K $48.2K $77.5K $40.8K $63.9K

$0 $20,000 $40,000 $60,000 $80,000 1-2 3-4 5-6 7-8 9-10 11-12 13-14 15-16 17-18 19-20 21-22 23-24 25-26 27-28 29-30 Maximum salary

Teacher Years of Experience

Calculated Average Teacher Salary by Years of Experience, 2016-17

Source: ERS analysis based on NCES Schools and Staffing Survey, Public Teachers and District Data Files 2011-12; Arizona Department of Education Teacher Experience Report FY17; Superintendent Annual Financial Report FY17; Expect More Arizona Progress Meter; Bureau of Labor Statistics Inflation Index; MIT Living Wage Calculator; US Census Bureau; Pew Research Center. This analysis uses average salaries based on teacher experience from 2011-12, adjusted for inflation to 2016-17 dollars. Due to data availability, salary data beyond year 14 is estimated based on the reported 15+ year average and reported maximum salary. Total investment based on 2016-17 teacher FTE for both district and charter; includes estimated teacher salary investment of ~$745M-$893M and benefits investment of ~$149M-$179M (assumes 20% benefits rate excluding fixed costs of health, dental, and life insurance, based on data from Arizona School Boards Association)

Family living wage 2017: $58.2K National median teacher salary 2017: $54.7K Calculated AZ teacher salary trajectory 2017 Proposed increase to reach family living wage in 11-12 years Proposed increase to reach family living wage in 5-6 years

Alternately ly, , districts could use se th that $900M-$1.1B in investment to dif ifferentia iate sal salary ry bas ased on contr trib ibutio ion to im improve recru ruit itment an and retentio ion of f th the most effecti tive teachers

32

Source: ERS analysis based on NCES Schools and Staffing Survey, Public Teachers and District Data Files 2011-12; Arizona Department of Education Teacher Experience Report FY17; Superintendent Annual Financial Report FY17; Expect More Arizona Progress Meter; Education Sector Inside IMPACT: D.C.’s Model Teacher Evaluation System; Bureau of Labor Statistics Inflation Index; MIT Living Wage Calculator; US Census Bureau; Pew Research Center. This analysis uses average salaries based on teacher experience from 2011-12, adjusted for inflation to 2016-17 dollars. Due to data availability, salary data beyond year 14 is estimated based on the reported 15+ year average and reported maximum salary. Due to lack of AZ effectiveness data, analysis uses effectiveness breakdown from DCPS (selected because of history of strong teacher evaluation system and aligned compensation model) of 2% ineffective, 16% minimally effective, 67% effective, and 15% highly effective. Total investment based on 2016-17 teacher FTE for both district and charter; includes estimated teacher salary investment of ~$745M-$893M and benefits investment of ~$149M-$179M (assumes 20% benefits rate excluding fixed costs of health, dental, and life insurance, based on data from Arizona School Boards Association)

$35.5K $57.1K $36.4K $46.0K $39.8K $59.6K $40.8K $63.9K $42.3K $71.0K

$0 $20,000 $40,000 $60,000 $80,000 1-2 3-4 5-6 7-8 9-10 11-12 13-14 15-16 17-18 19-20 21-22 23-24 25-26 27-28 29-30 Maximum salary

Teacher Years of Experience

Calculated Average Teacher Salary by Years of Experience, 2016-17

Family living wage 2017: $58.2K National median teacher salary 2017: $54.7K Calculated AZ teacher salary trajectory 2017 Proposed increase for highly effective teachers Proposed increase for effective teachers Proposed increase for minimally effective teachers Proposed increase for ineffective teachers

Ariz izona dis istric icts may have some lim limit ited

• pportunit

itie ies to shif ift current spendin ing, g, but the state will ill need to generate additional revenue for teacher sala lary ry in investments

Key Findings

To effecti tively ly improve th the teacher work rkforce, Ariz rizona would need to in invest ab about $900M-$1.1B annuall lly, , or r ~$970 per r pupil il

34

Source: ERS analysis of data from Arizona Joint Legislative Budget Committee Non-Capital Funding Report 2017; ERS analysis of teacher salary investments. Uses estimated FY17 student enrollment from JLBC report of 1,104,753; Analysis assumes high end of teacher compensation investment, $1.1B

$7,145 $1,215 $970 $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 2016-17 average per-pupil revenue (non-capital) Additional average per-pupil investment for teacher salary increase

Estimated Average Per-Pupil Revenue Required for Teacher Salary Investment

Federal revenue State and local revenue $8,361 $8,361 $9,331

This equals a total increase of 11.6% per pupil on average, and an 13.6% increase in state/local funds only.

Compared to th the lo lowest-spend conservative states, Ariz izona dis istr tricts ts spend slig lightly more on support t servic ices

35 $6,319 $5,031 $4,037 $3,932 $2,907 $3,026 $484 $458 $394 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 United States median Median of lowest spend conservative states Arizona

Per-Pupil Expenditure by Use, 2013-14, Adjusted for Geography

Non- Instruction Support Services Instruction

Source: ERS analysis of data from NCES Instruction Expenditures per pupil [State Finance] 2013-14, Support Services Expenditures per pupil [State Finance] 2013-14, Non- Instruction Expenditures per pupil [State Finance] 2013-14; NCES Comparable Wage Index; Gallup Ideology by State 2016; Lowest spend conservative states are (excluding AZ): CO, FL, GA, ID, MS, NC, NV, OK, TN, TX, UT, VA

Th There may y be an an opportunity to real allo locate so some reso sources fr from stu tudent su support an and O&M to help lp fu fund th this is teacher sal salary ry in investment Compared to the median of the other lowest spend conservative states:

• Within student support services, Arizona spends an additional 0.8%

per pupil on purchased services and 0.8% per pupil for compensation (due to low student support staffing ratios)

• Within operations and maintenance, Arizona spends an additional

2.0% per pupil on purchased services and 0.4% per pupil on supplies

36

Source: ERS analysis of data from NCES Student Support Services Subtotal [State Finance] 2013-14, Instruction Support Services Subtotal [State Finance] 2013-14, General Administration - Subtotal [State Finance] 2013-14, School Administration - Subtotal [State Finance] 2013-14, Operations & Maintenance - Subtotal [State Finance] 2013-14, Student Transportation - Subtotal [State Finance] 2013-14, Other Support Services - Subtotal (STE28) [State Finance] 2013-14 ; Fall Membership (MEMBR) [State Finance] 2013-14; Gallup Ideology by State 2016; NCES Comparable Wage Index; Lowest spend conservative states are (excluding AZ): CO, FL, GA, ID, MS, NC, NV, OK, TN, TX, UT, VA

Together, th these sa savin ings opport rtunit itie ies ar are not t enough to meet t th the teacher in investment revenue gap ap

37 $8,361 $8,361 $8,026 $970 $334 $636 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 Average per-pupil revenue 2016-17 (non-capital) Additional average per-pupil investment for teacher salary increase Average per-pupil revenue accounting for potential savings and reinvestments

Estimated Average Per-Pupil Revenue Required for Teacher Salary Investment

$9,331 $8,997

Remaining gap to fund teacher salary investment Potential savings

• pportunities from

existing resource reallocation

Source: ERS analysis based on data from NCES Student Support Services Subtotal [State Finance] 2013-14, Instruction Support Services Subtotal [State Finance] 2013-14, General Administration - Subtotal [State Finance] 2013-14, School Administration - Subtotal [State Finance] 2013-14, Operations & Maintenance - Subtotal [State Finance] 2013-14, Student Transportation - Subtotal [State Finance] 2013-14, Other Support Services - Subtotal (STE28) [State Finance] 2013-14 ; Fall Membership (MEMBR) [State Finance] 2013- 14; NCES Comparable Wage Index; Arizona Joint Legislative Budget Committee Non-Capital Funding Report 2017; ERS analysis of teacher salary investments; $334 per pupil savings based on previous savings calculations totaling 4% of total expenditure in 2013-14, and applying that 4% savings to a per pupil revenue of $8,361 in 2016-17; Analysis assumes high end of teacher compensation investment, $1.1B

Aft fter real allo locatin ing hal alf f of f th these reso sources, Ariz rizona could fu fund th the remain inin ing teacher sal salary ry in investment by y inc increasin ing state effort rt for r educatio ion to 3.2 .2%

38 $7.9B $7.9B $7.7B $7.5B $184M $369M $1.1B $887M $703M $0 $1,000,000,000 $2,000,000,000 $3,000,000,000 $4,000,000,000 $5,000,000,000 $6,000,000,000 $7,000,000,000 $8,000,000,000 $9,000,000,000 Current AZ effort (2.9%) Raising effort to generate increased teacher compensation investment (3.3%) Raising effort to generate increased teacher compensation investment after making 50% of reallocation shifts (3.2%) Raising effort to generate increased teacher compensation investment after making 100% of reallocation shifts (3.1%)

AZ Total State and Local Revenue 2016-17 (Non-Capital) and Projected, Based on Effort

State and local revenue Savings from reallocation shifts Additional revenue required

Source: ERS analysis based on Arizona Joint Legislative Budget Committee Non-Capital Funding Report 2017; Bureau of Economic Analysis; ERS analysis of teacher salary investments; Savings estimates based on previous per pupil calculations totaling 4% of total expenditure in 2013-14, and applying that 4% savings to a per pupil revenue of $8,361 in 2016-17; total estimated saving shown here based on applying those per pupil savings to estimated FY17 student enrollment from JLBC report of 1,104,753; additional revenue required based on estimate of $1.1B investment for increasing teacher salaries