News Story

School Boards Routinely Violate Merit Pay Law

Obama offered states grants to innovate, merit pay was Granholm’s response

High-profile teacher strikes in three states earlier this year put a spotlight on teacher salaries. But there has been less attention given to how one method of increasing teacher pay for the "best and brightest" has largely been ignored in Michigan.

One idea, paying more for better teacher performance, became the law in Michigan in 2010, when then-Gov. Jennifer Granholm approved a bill requiring school districts to make job performance a “significant factor” in determining teacher compensation. The law was a response to an Obama administration policy of using competitive grants to encourage states to implement merit pay and other reforms.

But eight years later, many Michigan school districts either ignore the law or make only token gestures toward compliance. For example, at least three school districts in Michigan give their best teachers an extra dollar ($1) for being rated “highly effective.”

Michigan Capitol Confidential sent a Freedom of Information Act request to every school district in the state asking for its merit pay policy. Under Michigan’s public sector union law, unions and school boards are prohibited from collectively bargaining over merit pay. That means school boards can implement it even without having it in a union agreement. This also means that merit pay policies do not appear in teacher union contracts.

Of the 406 school districts that responded to the open records request, 175 reported having no merit pay system and 231 districts stated they had some form of merit pay.

But many of the school districts that reported having a merit pay system probably would not meet the definition laid out in the 2010 law. For the law says that each district “shall implement and maintain a method of compensation for its teachers and school administrators that includes job performance and job accomplishments as a significant factor.”

One district offered an extra $25 to its best teachers. One common merit pay loophole involves the seniority-based teacher pay scale. Under this system, all teachers move up one step on the pay scale “ladder” after so many years. But some school districts assert that their teachers must receive a district performance rating of “effective” or “highly effective” to get to the next step, and then call their contractual seniority-based step hikes “merit pay.” (The only other ratings are “minimally effective” and “ineffective”). But those school districts generally rate 99 percent of their teachers either “effective” or “highly effective,” so, in effect, all their teachers are automatically deemed to be earning merit pay.

The Michigan Department of Education said it has no power to enforce the law.

“Unless a section of state law specifically applies a consequence or penalty for noncompliance by a school district, the department has no authority to act on its own or begin legal action against a school district or school board,” said department Spokesman Bill DiSessa.

Michigan Capitol Confidential will be reporting on other responses and abuses surrounding the state’s merit pay law.

“The fact that most districts are sticking with the steps-and-lanes pay system sends a signal that teachers are more like interchangeable parts on an assembly line than individual professionals with a unique combination of knowledge, abilities and life experiences,” said Ben DeGrow, the education policy director at the Mackinac Center for Public Policy. “If you’re going to complain that not enough young people are considering a teaching career, or that schools need to do a better job meeting individual student needs, then overhauling the old salary schedule model needs to be high on the priority list.”

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.