Step Increases: The Big Teacher Raises That Don’t Make the News
Many public school teachers get more than one raise during a school year. While across-the-board cost of living increases have been reported to be as less than 1 percent in some media reports, it is the automatic step increases that generate the biggest boost in earnings for teachers. And these increases are largely ignored in most media accounts.
“Step increases provide automatic rewards when teachers merely notch another year on their belt,” said Michael Van Beek, education policy director at the Mackinac Center for Public Policy, in an e-mail. “These lock in significant cost increases for districts and put a large amount of strain on school budgets.”
The Mattawan Board of Education sent a letter to parents saying that budget needs necessitated that the district send layoff notices to all of its 207 teachers. Mattawan is facing a projected $4-million deficit in 2011-12, according to the Kalamazoo Gazette.
Yet, Mattawan teachers who have 13 years of service or less are still set to receive step increases of more than 5 percent for this year and the next two. Van Beek said 65 percent of Mattawan’s teachers have 11 years or less experience.
The school board’s May 16 resolution acknowledges these “contractual step increases” as part of the reason that the district is facing a $1,100 per student funding challenge. The resolution states that the board is “proactively working with the teachers union to reach a total cost reduction. At this time, we are still discussing how that reduction will be implemented.”
Mattawan Superintendent Patrick Bird didn’t respond to an e-mail seeking comment.
Throughout the state’s recent education funding debate, much of the news media has failed to take the large salary bumps represented by step increases into account when reporting that districts are supposedly cutting costs.
For example: The Saginaw News produced a story regarding Saginaw Public School teachers working three years without a contract. The headline read: “Saginaw teachers still paid their 2008 salaries, not taking cuts requested by several board members.”
However, many of those teachers still received annual pay raises of about 5 percent due to advancing in years of service on the salary scale in the expired deal. The step increases, in other words. A teacher with six years of service and a bachelor’s degree would have received a 16.5 percent increase in pay over three years due to step increases in the expired contract that remain in force until a new contract is in place.
Because of this, when a district is in financial trouble, there is a perverse incentive for the union to avoid a new contract that may lead to a less generous step increase schedule. Instead, a union such as the one in Saginaw might prefer to keep the rules of the expired contract indefinitely and avoid coming to the bargaining table for a new one. And currently, the law allows for just that result.
But the Legislature has passed a bill to put a stop to this, effectively ending step increases when the contract expires, thus creating an incentive for both parties – district and union – to replace the expired contract with something more financially workable. House Bill 4152 was passed by the House and Senate and is awaiting either signature or veto by the Governor. The bill passed on a mostly party-line vote, with Democrats in opposition.
However, five Republican senators sided with the Democrats to preserve the step increases after union contracts expire: Tom Casperson of Escanaba, Bruce Caswell of Hillsdale, Rick Jones of Grand Ledge, Mike Nofs of Battle Creek, and Tory Rocca of Sterling Heights.
Still, school officials have said it won’t be easy for them to reduce step increases.
In 2010, Alpena Public Schools approved a contract with its teachers that included step increases of nearly 5 percent. For example, a fourth-year teacher with a master’s degree in 2009-10 would have a salary of $45,561. That salary would increase 4.9 percent to $47,795 in 2010-11.
At the time, Superintendent Brent Holcomb said that getting health care cost sharing concessions was more important than trying to change step increases.
"Trying to change the culture of steps and those expectations — that would be Mt. Everest-ish," Holcomb said last year. "You have to pick your battles."
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.