Public schools opt for teacher bonuses instead of pay increases

Gov. Doug Ducey and Republican legislators didn’t trust school officials to give teachers raises, so they created a special line-item in the budget dictating those dollars be given to boost teacher pay.

Now school officials don’t trust the governor and lawmakers to follow through on their promise to make that pay hike permanent.

During the legislative session, Republican lawmakers embraced a narrative that school administrators weren’t giving teachers appropriate raises, and used those claims as a reason to create a new appropriation for teacher raises. It was necessary, according to officials from Ducey’s office, to ensure that the $34 million provided for a 1 percent pay raise was actually spent on teachers, not elsewhere in classrooms or schools.

But the nature of how those dollars are funded has school officials wary of simply adding pay to the base salary of their teachers.

Ducey has vowed the funding will go on. He has promised another 1 percent pay hike in next year’s budget, and to make permanent the 2 percent hike over two years after that.

School officials say they won’t count on it until they see it. So instead of increasing teachers’ base salaries, some schools are preparing to make a lump sum payment to teachers in the amount of 1 percent of their salaries.

Call it a stipend, call it a bonus. Whatever the case may be, school officials say it’s the best option they have given the method by which Republican lawmakers provided the funding.

“I don’t believe any school district in Pima County is going to pay it as part of the base salary,” said Ricky Hernandez, chief financial officer of Pima County School Superintendent’s Office. “Most of them are going to provide it as a one lump sum stipend, or more than one lump. Some might do it in December and May. But they’re going to do it outside of the base salary.”

That’s because the funding for the pay raise wasn’t included in the baseline funding formula that schools use to help pay teacher salaries, among other educational costs. The governor wanted to ensure the money went to teacher pay, and nothing else, said Patrick Ptak, the governor’s spokesman.

“A lot of advocates wanted that to be folded into the budget, but you never know where that funding could end up at that point, so for that reason it was kept as a specific line item,” Ptak said.

Just because the pay is a stipend doesn’t mean it doesn’t add toward an employee’s annual pay, meaning it will count toward important metrics like a teacher’s retirement, Hernandez said. But there’s a key distinction of paying the amount out as a stipend rather than increasing the salary – if the Legislature’s desire to fund the line item for higher teacher pay wanes, schools won’t be left holding the bag for higher salaries.

“We want to pay it, but we want to pay it in a way that it’s not going to be detrimental down the road,” Hernandez said.

Chuck Essigs, a lobbyist for the Arizona Association of School Business Officials, said another reason to opt for a lump sum is the auditing requirements built into the budget for the pay raise. Ducey and legislative Republicans wanted proof the money will be spent as intended.

Paying the few hundred extra dollars that an average teacher will receive thanks to the pay bump makes it simpler to audit, Essigs said.

Ken Hicks, chief financial officer of the Peoria Unified School District, said he’s advising schools in the district to pay up in one stipend, likely in December. Planning on how to adjust pay that’s directed to districts outside the baseline has been a bureaucratic headache, but in the end, a stipend may be simpler for schools and more meaningful teachers, he said – a lump payment might seem better than a few dollars here or there in each paycheck.

Ptak pointed to budget documents produced by the Joint Legislative Budget Committee that show funding for the 2 percent pay hike continuing after the two-year phase in.

Those documents are simply projections, however, and have no binding effect on future lawmakers.

Ptak acknowledged that, even in the future, the appropriation for the 2 percent pay bump is and will continue to be a line item. But that shouldn’t concern local school officials, he said.

“You go into each budget year, nothing is guaranteed at that point. Even appropriations in the baseline,” Ptak said. “So technically, putting something in the baseline, that wouldn’t necessarily ensure it stays there. But having it as a specific line item, we can ensure that it’s going 100 percent to teachers.”

Ptak said that fears about economic troubles in Arizona are “hypotheticals,” but they’re real concerns to school officials like Hernandez and Essigs, who’ve watched the state’s funding for schools on a per-student basis drop dramatically after the Great Recession.

Arizona funded schools at $4,487 per-student during in the 2007-2008 school year. At the end of the 2016-2017 school year, funding per-student was still less than it was nearly a decade ago, at $4,324 per-student.

“The school districts are doing what they have to do to make sure that they prepare for whatever may or may not happen,” Hernandez said.