Teacher compensation is the largest and most important component of public school expenditures. Like other southeastern states, Alabama in the past has paid teacher salaries that were well below the national average. This low-salary policy began to change in recent years, however, with teachers receiving substantial raises in 1994-95 (8.5%), 1996-97 (4%), and 1998-99 (8.5%). Since 1994, the average teacher salary in Alabama has risen by more than $7,000, or 25 percent, climbing from 41^st to 29^th in the state rankings compiled by the National Education Association (NEA). Consideration is now being given to a policy of paying Alabama’s teachers at the national average salary. This report looks at how public school teacher compensation in Alabama compares with other states.

    Public school teachers in Alabama are paid according to local salary schedules that provide increasing compensation for additional levels of education and years of service. The Legislature created a state salary matrix in 1995 and updates it each year in the education appropriations act. The state salary matrix for Fiscal 1999-2000 is shown in Table 1, below. Each local school system is required by law to adopt a salary schedule that provides at least 100 percent of the applicable amounts from the statewide salary matrix. As the table shows, the state salary matrix is based on a standard state contract length of 182 days, which includes 175 days of school and 7 days of teacher preparation and professional development time.

The state foundation program provides funding for teacher units based on the state salary matrix. Some school systems pay more than the minimum, particularly for experienced and highly educated teachers. These systems are required to use their own local tax dollars to pay the amounts that exceed the state salary matrix. Table 2, below, compares the state salary matrix with salary schedules in two school systems, for teachers with a master's degree. The Greene County System pays at the state salary matrix level and employs teachers on a 182-day contract. The Homewood City System, on the other hand, pays substantially more for experienced teachers with master's degrees, and it employs teachers for 187 days.

Homewood teachers with master's degrees and twelve years' experience earn over $4,000, or eleven percent, more than their counterparts in Greene County; by the time they have accumulated 21 years of experience, they earn about $5,600 (fifteen percent) more. But teachers in Homewood also work five more days than their counterparts in Greene County. The right side of Table 2 shows a comparison based on daily rates of pay. By this measure, the salary of a Homewood teacher is twelve percent higher than that of a Greene County teacher (and the state salary matrix) at 21 years of experience.

Local school systems that pay more than the minimum are required to maintain the differential between their salary schedule and the state salary matrix whenever statewide pay raises are granted; that is, they must provide the entire percentage increase to all teachers. Or, to put it another way: once a school system begins to pay above the state-mandated minimum level in any of the cells of its salary schedule, then the level at which it pays (rather than the state salary matrix) becomes the base figure for that system.

Furthermore, if the local system hires teachers for more than 182 contract days, these state mandates apply to the daily rate of pay. Thus, since the Homewood City System hires teachers for 187 days, its minimum beginning salary for a teacher with a master's degree must be at least $33,549 ($32,652 X 187 / 182 = $33,549). As Table 2 shows, Homewood and Greene County pay the same $179-per-day starting salary for teachers with master's degrees, even though the Homewood teacher’s annual salary is about $900 higher. In effect, the state salary matrix is implemented on a daily rate of pay rather than in terms of annual compensation.

The recent report of the Alabama Task Force on Teaching and Student Achievement declared that:

"A well-prepared teacher is the critical ingredient in student learning… Each

dollar spent on improving teacher qualifications nets greater gains in student learning than any other use of an education dollar."

Adequate teacher compensation is a fundamental ingredient in improving teaching and learning. Teaching is a profession that requires great knowledge and skill. Teacher compensation should attract those with the potential to teach well and reward those who develop the attributes necessary for increasing student learning. Therefore, it is important to look at the following factors:

• Beginning salaries, which are important for attracting good candidates into the teaching profession.
• Salary progression throughout a teaching career, which is important for retaining teachers as they become more accomplished at increasing student learning, and for rewarding them on the basis of the skills they are developing.
• Retirement provisions, which are an important attraction for those entering the profession and an incentive to remain in teaching and employ the skills that are developed during a career.

In looking at the attractiveness of salaries, it is important to consider not only gross compensation, but also such factors as the employee's cost of fringe benefit programs, the cost of living in the community, and the general level of income in the community. On the following pages, we have looked at each of these perspectives in order to provide the kind of complete description that policy makers should have in setting teacher compensation.

We also have looked at the average teacher salary, which is a composite figure that substitutes for lack of detailed salary progression data. Teachers are compensated on the basis of salary schedules that provide additional pay for increases in experience and educational attainment. The average salary is affected not only by the salary schedules involved, but also by the average experience and educational levels of teachers. This can distort the real differences in compensation. If Alabama’s school systems used salary schedules equivalent to those in other states but employed younger teachers, or a lower percentage of teachers with master’s degrees, the state’s average teacher salary would be lower simply because of these teacher characteristics. On the other hand, if Alabama's teachers were more experienced, or more highly educated, its average salary would be higher for that reason alone. These kinds of differences do exist, as indicated by the following specific examples:

• A 1994 study by the National Center for Education Statistics (NCES) showed that Connecticut's teachers had over three years more experience than Alabama's, on average. Arizona's teachers, in contrast, had almost two years less experience than Alabama's. We should expect these kinds of differences to affect average salaries.
• Alaska created a three-year retirement incentive program for teachers that took effect in 1997. This program evidently worked, influencing teachers to retire, and the large number of retirements affected the average education and experience levels of the teacher workforce. The average teacher salary in Alaska fell from $50,647 in 1997 to $47,601 in 1998 and then to $46,845 in 1999 -- a drop of eight percent in just two years.

Teachers in Alaska are not paid less today than they were in 1997, for any given level of education and experience; but the average, based in all likelihood on falling levels of experience and education, suggests that they are. In the same way, a salary-increase plan that will stretch over several years creates an incentive for teachers to delay retirement in order to increase final average compensation. This kind of behavior would increase the average teacher salary artificially for a few years, and then reduce it when those who delayed retirement decided to step down.

Nevertheless, average salary data are readily available, and they have become an important indicator of relative compensation because of the lack of detailed information on salary progression. Since the available data do not compare what teachers with specific educational credentials are paid at benchmark points in their careers, the less-specific average figure is used as a substitute. The examples cited above suggest that caution is warranted in using the average salary as a benchmark figure. In its annual teacher salary study, the American Federation of Teachers (AFT) produces a table that adjusts state average teacher salaries based on the beginning teacher salary and average teacher experience. Unfortunately, the average experience data (which come from an NCES survey) are not collected every year. Average teacher salary comparisons would be more meaningful if they were published along with annual data on beginning teacher salaries, average education levels, and average experience levels of teachers.

Finally, it is important to consider the professional conditions under which teachers must practice. These include the teacher-student ratio, the length of the school year, and the investment in professional development programs, technology, and other forms of instructional support. These factors are a form of "compensation" for the teaching professional because they contribute to the success of the teaching mission. How Alabama compares in these areas is important to the success of our teacher compensation plan. These factors are addressed in the final section of the report.

Beginning teachers in Alabama are well compensated in comparison with their peers in other states. AFT data for fiscal year 1997-98, which are the most recent available, are shown in Table 3. The national average beginning teacher salary in that year was $25,735. Alabama's average, $27,388, was six percent and $1,653 higher than the national average, ranking ninth among all states. It also was the highest in the southeast, exceeding the Georgia average by $682. Every other southeastern state was below the national average.

The Alabama figure is even farther above the average beginning teacher salary paid by the average state. The national average shown in Table 3 represents the salary paid to the average teacher. This average is affected by the fact that the more populous states have more teachers and tend to pay higher salaries. This is why the national average is relatively high in the distribution shown in the table. The simple average of all states’ beginning teacher salaries for 1997-98 was $24,733, which represents the amount paid by the average state. Alabama’s average beginning salary was ten percent and $2,655 higher than that figure.

Salary Progression

Alabama’s beginning teacher salaries are very attractive in comparison with those paid in other states. How well is this attractiveness maintained throughout a teaching career?

Teacher turnover is one measure of attractiveness. Table 4, below, shows the number and percent of Alabama teacher units in each cell of the state salary matrix. These teacher units include professional personnel who are teachers, counselors, librarians, principals, and assistant principals in the public schools.

The rows of the table show teacher experience levels in the three-year increments of the salary schedule. The two points in the salary matrix where the number of teachers drops noticeably are at the third level (6-8 years of experience) and the fifth level (12-14 years). This suggests that Alabama begins to lose large numbers of teachers after about six years, and then again after about twelve years of experience.

The columns of the table show the educational levels of teacher units. At the lowest experience level, 24 percent of teachers have advanced degrees, and the percentage rises with experience. At the third level of the salary matrix (6-8 years), when it appears that large numbers of teachers begin to drop out, the percent of teachers with advanced degrees is more than twice as high as at the first level (54 versus 24 percent).

This suggests that most of those who leave have not progressed beyond the bachelor’s degree – and that those who begin to work on advanced degrees at the outset of their careers are more likely to stay in the teaching profession. It also suggests that a key attraction of the state’s salary schedule is the fifteen percent increase it provides those who improve their professional capabilities by obtaining a master’s degree. This attractive feature can be bolstered by additional rewards based on specific achievements, such as the $5,000 salary increase and $5,000 grant for classroom materials that Alabama now offers teachers who achieve certification from the National Board for Professional Teacher Standards.

To compare salary progression for teachers in the various states, we must have data from teacher salary schedules. According to the Education Commission of the States, 23 states have statewide teacher salary schedules. Normally the statewide salary schedule creates a minimum that local school systems are permitted to supplement. While some of these statewide schedules, like Alabama's, provide a meaningful basis for describing teacher salaries in the state, in other cases salary schedules are so low and supplemented so much by local school systems that any comparisons based on the schedule alone would not be valid.

There are no comparative data that would describe salary progression accurately in states that do not have meaningful statewide salary schedules. For this reason, most teacher salary comparisons rely on average teacher salaries, despite the fact that this gives an incomplete picture of salary progression throughout a teaching career.

Generally, the meaningful state salary schedules are found in southeastern states, where the state share of school funding is high. To provide a sense of how teacher salary progression in Alabama compares, we have analyzed statewide salary schedules for Alabama and four neighboring states that have meaningful state salary schedules. The results are shown in Table 5, at the top of the next page.

We have assumed that a teacher begins in each state with a bachelor's degree, obtains a master's degree at the end of the tenth year of service, and then obtains a 6-year (educational specialist) degree at the end of the twentieth year of service. The resulting salaries over a 30-year career -- calculated on both an annual and a daily basis -- are shown in the table. At the bottom, we have shown the 30-year average salary for each state. We also have shown the present value of the 30 years of income to a beginning teacher. This figure takes into account the time-value of the money a prospective teacher will earn in each of the states compared. Among the significant findings from this analysis are the following:

• First, the Alabama beginning teacher earns the largest annual salary by a comfortable margin. Georgia ranks second with a salary that is $2,066 lower. North Carolina ranks third with a salary that is $4,344 lower. Mississippi and South Carolina are both more than $5,000 lower.
• Second, the Alabama teacher maintains this salary advantage until the ninth year, when Georgia’s salary overtakes it. Teachers in North and South Carolina overtake their Alabama counterpart only in the seventeenth year, and Mississippi’s salary never exceeds Alabama’s.
• Third, by the thirtieth year, this teacher earns over $8,000 more in Georgia and North Carolina than in Alabama. However, South Carolina’s salary in the thirtieth year is only $255 higher, and Mississippi’s is lower. Alabama’s salary schedule, then, is "front-loaded." It provides a high starting salary but lower progression throughout the ensuing years, so that in the later years of a teaching career some other states may pay considerably more.
• Fourth, the 30-year average salary for the Alabama teacher is about nine percent less than Georgia’s, and about 1.5 percent less than North Carolina's, but it is larger than that in the other two states. While the North Carolina teacher makes substantially more in the later years, due to a higher rate of progression, Alabama’s initial salary advantage is almost large enough to offset the impact of the later years.
• Fifth, when the time-value of salary earnings is taken into account, through the calculation of a present-value figure, the Alabama teacher earns about six percent less

than a colleague in Georgia but more than colleagues in all of the other states. This figure reflects more accurately than does an average salary the value that a prospective teacher might put on a career in each of the five states. In other words, there is value in the fact that Alabama pays well at the start of a teaching career.

• Sixth, when we look at the daily salary rates on which these schedules were built, the Georgia teacher salary does not catch Alabama’s until the twelfth year, and North Carolina’s salary does not catch Alabama’s until the 26^th year. Mississippi and South Carolina are behind Alabama for the entire thirty years. The Alabama average daily pay for the thirty years is within five percent of Georgia’s and substantially ahead of all the other states.

As discussed below, Georgia is pursuing a policy of raising teacher salaries to the national average, and its average teacher salary in 1998-99 was very close to that goal. North Carolina is pursuing the same goal, although it currently trails Georgia in terms of average pay. South Carolina targets the southeastern average and pays above it. Comparisons with the teacher salary schedules in these neighboring states are a good way to document improvements in Alabama’s teacher compensation as we go forward.

The most recent data on average teacher salaries come from the NEA and are shown in the two parts of Table 6. The data show that Alabama’s average teacher salary of $35,820 in 1998-99 ranked 29^th among all states and the District of Columbia, and third among the ten southeastern states. The rankings are identical in each part of the table; only the averages vary. The table is divided into two parts because there are two ways to calculate a national average figure for comparison purposes.

Table 6A, on the left, shows a "U.S. Average" teacher salary of $40,462. There were 2,778,499 teachers in American public schools in 1998-99, and $40,462 is the salary paid to the average one among them. To derive this figure, the average salary for each state is multiplied by the number of teachers in that state, and the sum of these multiplications is divided by 2,778,499. This figure is influenced by the more populous states, which tend to have more teachers and to pay higher salaries. Table 6A shows the number of teachers in each state. Alabama's average teacher salary was $4,642, which was 89 percent of the salary paid to the average teacher in the U.S. It was $627 more than the average salary paid to a teacher in the southeast. Georgia, the highest-ranking southeastern state, had an average teacher salary only two percent lower than the U.S. average.

Table 6B, on the right, shows the average teacher salary paid by the average state. This figure treats each state equally and is calculated by adding the average teacher salary for all states plus the District of Columbia, and dividing the total by 51. The average