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Stagnant Teacher Salaries in Michigan: Recent Impact of Unfunded Retirement Obligations

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Stagnant Teacher Salaries in Michigan: Recent Impact of Unfunded Retirement Obligations September 2019 | Memorandum 1159 Stagnant Teacher Salaries in Michigan: Recent Impact of Unfunded Retirement Obligations Key Takeaways • Even as the average amount of per-pupil spending has increased 12 percent over the past five years, the new dollars are not finding their way into teachers’ paychecks. The statewide average teacher salary has remained at about $62,000. • Required pension obligation payments have taken on greater priority in education spending. Despite recent retirement system reforms, more and more school spending is going to meet unfunded retirement liabilities. • Unless changes can be made to ensure retirement obligations are met while providing adequate funding for other educational services, the outlook for Michigan’s teacher salaries remains gloomy. Introduction Michigan’s state government plays as large a role in other states. In the past year, teachers in Arizona, funding local schools as any state in the nation. The California, Colorado, Kentucky, Oklahoma, and state assumed this lead role in 1994 with the major West Virginia walked out of their classrooms and school finance reforms of Proposal A. During Mich- rallied in state capitols in protest to have their voices igan’s “lost decade,”a state appropriations for higher heard. These teachers were pressuring for smaller education, revenue sharing to local governments, classroom sizes, increased support staff, and more and general state administrative functions suffered financial resources. At the heart many of these pro- from restrained revenue growth; however, spending tests is a call for increased teacher pay and benefits. on public K-12 education remained a relatively high priority within the state budget. Many in the teaching Few would dispute that quality teaching is the most profession and other supporters of public education important in-school component in a child’s educa- nonetheless suggest that teacher pay has not kept tion. Teacher pay and benefits comprise the largest pace with those funding priorities in the last decade, shares of school budgets, but education dollars must thus contributing to the difficulties of attracting and also provide for support staff, student transportation, retaining high quality teachers. classroom supplies, and retirement costs. While the state has increased spending on education, the large The plight of teacher pay in Michigan has not at- amounts necessary to finance unfunded retirement tracted the same levels of public attention as in liabilities have left little for increased spending inside Michigan classrooms, as would be reflected in rising a A reference to the fiscal disruptions to state and local teacher salaries. government finances arising from Michigan’s single-state recession (2001-2007) and the Great Recession (2007-2009). 38777 Six Mile Road, Suite 208 | Livonia, MI 48152 | 734.542.8001 115 West Allegan, Suite 480 | Lansing, MI 48933 | 517.485.9444 P.O. Box 1612 | Holland, MI 49422 | 616.294.8359 | crcmich.org Stagnant Teacher Salaries in Michigan National Rankings From a national perspective, Michigan teacher Chart 1 salaries are doing well. Michigan ranks 13th Average$90,000 Teacher Salary by State, 2018 highest in the nation with an average teacher salary of $62,702 in 2018, four percent above $80,000 the national average salary ($60,483) (Chart 1).b Washington ($55,175) has the median aver- $70,000 Michigan age teacher salary. The highest salaries are $62,702 st United States predominantly in the Northeast; New York (1 ), $60,483 Massachusetts (3rd), and Connecticut (5th). Oth- $60,000 er states with averages greater than Michigan nd th include California (2 ), Maryland (7 ), Pennsyl- $50,000 vania (9th) and Illinois (11th). Data reported by the National Education Association (NEA), the $40,000 largest teacher union in the country, also places Michigan at 13th nationally. $30,000 IL IA RI HI ID IN MI FL NJ WI LA VT TX AZ CT AK PA TN VA KS KY UT DE NY CA NV SC SD DC NH NC MT GA ND OK MA OR OH ME AL MS MD MN NM WY WA WV AR NE CO MO The National Education Association also reports USA Source: National Center for Education Statistics, Digest of the average starting salary in each state. In Education Statistics 2018, Michigan ranked 34th in the nation for starting salary at $36,599 and below the national Chart$60,000 2 average of $39,249 (see Chart 2). Average Starting Teacher Salary by State, 2018 The difference between Michigan’s rankings on $55,000 these two measures of salaries is noteworthy. In spite of having a mean salary that falls above the $50,000 U.S. average, Michigan teachers start out mak- ing less money than teachers in other states. A $45,000 couple possible explanations for the ranking dis- United States crepancies are that Michigan’s teachers either $39,249 receive larger annual salary bumps (referred to $40,000 Michigan as “steps”) or receive salary increases sooner in $36,599 their careers. Collective bargaining agreements $35,000 in various districts around the state outline step increases with pay jumping about $2,000 per $30,000 IL IA HI RI IN ID MI FL NJ WI LA TX VT AZ CT UT TN AK PA VA KY KS CA NY DE NV SD SC DC ND NC NH MT GA OK MA OR OH ME MS AL MD MN NM WY WA WV NE AR CO MO step at the beginning of a schedule. Compared USA Source: National Education Association b The National Center for Education Statistics (NCES) annually publishes rankings of the states based on a variety of school finance metrics. The NCES rankings are based on information provided by state departments of education, local school districts, and other regional bodies. Citizens Research Council of Michigan Board of Directors ALEKSANDRA A. MIZIOLEK, Chair CHASE CANTRELL ANN D. FILLINGHAM EARLE “WIN” IRWIN PAUL R. OBERMEYER MICHAEL P. MCGEE, Vice Chair STEPHAN W. CURRIE RON FOURNIER WENDY LEWIS JACKSON JAMES M. POLEHNA LAURA APPEL , Treasurer DANIEL DOMENICUCCI JUNE SUMMERS HAAS HARRY KEMP KIRK PROFIT TODD ANDERSON TERENCE M. DONNELLY JASON HEADEN NICK KHOURI CAROLEE K. SMITH SANDY K. BARUAH RANDALL W. EBERTS RENZE L. HOEKSEMA THOMAS G. KYROS CHRISTINE MASON SONERAL BETH BIALY TYLER ERNST MARYBETH S. HOWE ANNE MERVENNE KATHLEEN WILBUR LAWRENCE N. BLUTH RICHARD A. FAVOR, JR. 2 Official Research Paper Lorem Ipsum Research Paper Title Lorem Ipsum Sub-Heading Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et. Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac. Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc. Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo. Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel. Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec tincidunt congue fringilla. Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante. Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec tincidunt congue fringilla. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante. 115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1 Stagnant Teacher Salaries in Michigan to states that have instituted statewide minimum distribution of districts (those with at least 500 stu- salary schedules, many beginning step increases dents),c, the lowest average teacher salary in fiscal are about $1,000.1 year (FY) 2018 was Webberville Community Schools in Ingham County ($38,033) while Walled Lake Michigan’s statewide average hides considerable Schools (Oakland County) had the highest average district-level variation. At the extreme ends of the salary at $81,168. Perspectives on Teacher Pay Research on teacher salaries provides a wide range of perspectives on how salaries should be set, evaluated, and potentially changed.
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