Rob Christensen

Christensen: Partial pay raise plans affected by tax cuts

rchristensen@newsobserver.comFebruary 11, 2014 

The silence was deafening.

Earlier in the morning, Gov. Pat McCrory and the GOP legislative leadership had unveiled in Jamestown their pay raise plan for North Carolina public school teachers – raising the starting salary over two years from $30,800 to $35,000 but leaving salaries for most teachers unchanged.

A video clip of McCrory’s announcement was played on a large screen before 1,200 educators and business and civic leaders gathered in a cavernous hall at the Raleigh Convention Center where a two-day conference on teaching was being held.

You could have heard a pin drop. No applause. None. The reception wasn’t much better when McCrory showed up in person later in the day – polite, but cool.

Tough crowd.

That’s what happens when North Carolina is now ranked 46th out of 50 states in the country in teacher pay.

The picture is even worse for starting teachers, with the Tar Heel State ranked 49th in the country.

After months of speculation and buildup about a teacher raise, the GOP leadership unveiled a proposal that will raise the salaries of about 44 percent of North Carolina teachers – 42,000 of 95,000 teachers or 38 percent of all school personnel that are usually included in raises.

Modest proposal

The GOP proposal is a modest one that would hardly move the needle in the view of education experts. At most, it would move North Carolina’s 46th ranking up several positions – assuming that other low-ranking states did not raise their teacher salaries.

Because of the state’s poor rural roots, North Carolina has never ranked high in spending on teacher salaries. To climb out of the basement has always required political will and a concentrated push by the political and business leadership.

That occurred in the 1990s, under Democratic Gov. Jim Hunt, for example, when teacher salaries reached the national average. Not coincidentally, between 1992 and 2000, North Carolina led the nation in student improvement in mathematics in fourth and eighth grades as measured by standardized tests. Texas Gov. George W. Bush used Texas’ increase in the same test scores – Texas was second to North Carolina in gains – to help win the presidency in 2000.

Pasi Sahlberg, a former top education official from Finland, remembers visiting North Carolina in the 1990s, when the state was considered one of the true islands of education excellence in the country. Sahlberg spoke to the Emerging Issues Forum, founded by Hunt, on Monday.

But with the recession of 2008 came deep cuts in the state budgets and salary freezes for teachers and state employees under both Democratic and Republican governors and legislators. In the past five years, only once – a 1.2 percent increase in 2012 – have teachers received a raise.

Tax cuts, not raises

The GOP did not cause this problem. But it is now the Republicans’ responsibility that North Carolina teacher salaries trail all but those in New Mexico, West Virginia, Oklahoma, Mississippi and South Dakota.

McCrory said he would like to give a larger pay raise to teachers – and to other state employees as well – and may recommend doing so if money becomes available.

As a rationale for not giving larger raises, McCrory cited cost overruns in Medicaid, the health insurance program for the poor.

But to govern is to choose. McCrory ran for governor in 2012 on the platform of cutting taxes, not raising teacher salaries.

And coming out of the recession last year, McCrory and GOP lawmakers made tax cuts rather than teacher raises the priority.

Raising the minimum salary for North Carolina public school teachers will cost the state roughly $200 million during the next two years. But the legislature last session passed what has been described as the biggest tax-cut package in the country – including changing the progressive income tax into a flat tax, cutting the corporate income tax, and ending the inheritance tax for estates worth more than $5 million, the only estates still taxed.

The total tax package will have a budgetary impact of $1.7 billion over five years and $302 million over the next two years.

Republicans such as Sen. Jerry Tillman, using the supply-side argument, say they believe the tax cuts will stimulate economic growth, eventually providing more tax dollars to pay for future public services such as teacher salaries.

Besides economic arguments, there are also political considerations. Many of the beneficiaries of the tax cuts – businesspeople and big donors – are key elements of the GOP’s political base. Teachers, particularly those aligned with the N.C. Association of Educators, are more closely aligned with the Democrats.

At the Emerging Issues Forum, speaker after speaker talked about the importance of valuing teachers, treating them as professionals and providing them adequate pay.

Hunt, who presided over the forum, expressed disappointment that McCrory and GOP lawmakers had not provided a pay increase for all teachers. Hunt has urged policymakers to push to bring teacher salaries to the national average.

There is some sentiment for that in GOP circles. Lt. Gov. Dan Forest has called for raising teacher salaries to the national average. State Rep. Bryan Holloway is among those who said he preferred an across-the-board salary increase rather than a raise for just starting teachers.

Whether the GOP will get behind a sustained push for higher teacher salaries is an open question. The Republican education agenda seems scattered among a broad range of initiatives that include expanding charter schools, making “opportunity scholarships” or vouchers available for at least some students to attend private schools, ending tenure for teachers and supporting merit pay.

Even if the Republicans can focus on a few initiatives, will the money be available to fund them?

Christensen: 919-829-4532 or rchristensen@newsobserver.com

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