Texas Pays Its Best Educators up to $32,000 to Keep Them in the Classroom

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Great teachers matter. A lot.

This is not a new finding, but Texas is actually doing something about it, by providing millions of dollars in school funding explicitly tied to teacher quality. The way Texas is doing it stands in contrast to past efforts and could be a model for other state and national policymakers.

During the Obama administration, state, district and federal leaders all seized on research on the importance of great teachers. One study at the time found that high-quality educators can boost college outcomes and early-career earnings and even reduce the rate of teenage pregnancy.

But many of those policy efforts focused on the nuts and bolts of evaluating teacher quality, rather than using the results to drive personnel decisions. They became a top-down exercise in measurement and bureaucracy rather than a human capital tool. Predictably, that effort largely failed, and it kicked off a backlash against federal education policy writ large and specifically around teacher policy.

But over the last few years, Texas has slowly built a new approach that could be a path forward. The state is offering carrots, not sticks, as a way to get districts to behave differently. And it’s working. Not only is Texas offering its best teachers a lot more money, those educators are staying in the classroom in greater numbers.

It’s called the Teacher Incentive Allotment program. To qualify, districts submit their evaluation systems for state approval and explain how they will identify and designate a certain percentage of their teachers as outstanding, based on student growth — which may or may not include test scores — and classroom observations. The state then awards those districts extra money for each designated teacher.

Districts must use a validated observation rubric and evaluate educators at least annually. Under state guidelines, a “Master” teacher would perform at about the 95^th percentile, an “Exemplary” teacher between the 80th and 95^th percentiles and a “Recognized” teacher at the 67^th percentile or above.

After the state verifies a district’s evaluation process, it starts sending out real money. Each Recognized teacher earns at least $3,000 for his or her school, with higher amounts for Exemplary and Master teachers. Extra funding is awarded if the teacher works in a high-need or rural school. For example, a Master teacher in such a school could bring in an extra $32,000 a year. 

Critically, the money doesn’t flow to teachers directly, and districts have some flexibility in how they spend the funds. They can pass on the full amount to the designated teachers, or divide it among those teachers and other support staff at the same school. A district can also reserve up to 10% of the money to pay for professional development and other activities related to the designation system.

Once teachers earn a designation, they keep it for at least five years. If they change schools or districts, the money follows them. This gives them additional power. But, because the designations are worth more in higher-poverty schools, districts have an incentive to try to keep their designated teachers in their classrooms.

In addition to providing higher pay, this process is also a way for the state to acknowledge and thank great teachers. The state provides template letters for districts to send to their designated teachers to notify them of both how much they earned for their school and how much extra they personally will receive.

Since its inception in 2018-19, Texas legislators have expanded the program and tinkered with its design. Legislation passed this year raised the dollar amounts for each designation, allowed districts to incorporate principals in the future and created a new category of “Acknowledged” educators, those at the 50^th percentile or above. The number of districts participating has also swelled, from 33 at the start to 597 last year — about half of all districts statewide. Importantly, the extra money seems to be helping to keep teachers in the classroom. Last year, 19% of all non-designated teachers left their districts, compared with just 10% of the designated teachers.

Other states and federal policymakers could learn from the Texas approach. Rather than getting bogged down in the details of evaluation systems, it offers carrots to districts that are able to create systems that can meaningfully differentiate among their teachers. And, by putting real money behind it, the state is providing incentives for its best educators to work in the hardest-to-staff schools. Through its allotment program, Texas is raising the pay of its best teachers by thousands or tens of thousands of dollars each year, and sending a powerful signal that it values their work and wants them to continue teaching.

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