All of the Board of Elementary and Secondary Education, the Republican Gov. Jeff Landry Administration, and the Louisiana House of Representatives not only have acted prudently with education spending this year, but they also laid the foundation for improved educational delivery.
HB 1 by GOP state Rep. Jack McFarland, the operating budget, passed unanimously. It actually didn’t change much from last year’s, with marginal changes in a few areas of policy where few expenditures changes proportionally more than trivially from the previous year, and with almost every exception being relatively small absolute amounts. That was good in that next year a temporary 0.45 percent sales tax, on the books since 2016, finally will disappear, meaning now was not the time for significantly greater spending.
The area with the biggest change was elementary and secondary education, which will see an overall decrease in spending, but that is due to vanishing federal pandemic-related funds as well as (for the moment) reduced Recovery School District demands. Those aside, the actual amount falls about $25 million from last year, even though the Minimum Foundation Program goes $71 million higher. That happens because while the student count is about a half percent lower and the base $4,015 per pupil amount remains the same, the per pupil amount for mandated costs, or an inflationary factor for insurance, fuel, and pensions, jumped from $100 (last set in 2009) to $122, and supplemental additions in attracting and retaining teachers and class offerings also moved higher. The three single areas moving the highest were accelerated tutoring ($30 million), differential compensation ($25 million), and mandated costs ($14.3 million).
The MFP formula, constitutionally, comes from BESE and must be passed or rejected by the Legislature without change. If rejected, as occurred last year, the formula used reverts to that use in the previous year (which itself may be a formula from a previous year, depending upon the last time the Legislature adopted it).
Last year’s carried a $2,000 pay raise for educators and $1,000 for other employees as well as $25 million in differential pay. But ultimately the Legislature failed to act on that in favor of a separate line item that technically made all of this good just for this fiscal year. Ironically, given what was to come, the rejection of the 2023 MFP came in part as a result of opposition to the differential pay increase as a permanent feature, as well as disgruntlement over rejection of a financing mechanism that would pay down pension liabilities while allowing for pay raises that would not have been uniform but dependent on local education agency decisions.
Because that rejection was a blessing in disguise that didn’t lock in the $198 million in raises plus the $25 million for future formulas. Instead, recognizing then that revenue roll-off to come demanded increasing budgetary flexibility, BESE – the composition of which changed dramatically as a result of fall elections – this year produced a formula that included the differential pay but not the raises. Landry responded by offering $127 million more outside the formula in his budget submission and the House upped the ante to $166 million more (although that left a $24 million hole to be dealt with as the process plays out). This means instructional spending in essence advances $110 million, after backfilling the original $127 million from the general fund.
It would mean, if given across the board, for teachers a stipend of around $1,675 each for next year. Except the House included language that would allow local education agencies to treat the extra as differential compensation that allows districts to determine its distribution. The formula specifies four ways in which this may work, three of which don’t kick up controversy typically have been where much of differential compensation funds have gone, such as attracting teachers in high need environments.
It’s the other use where the bulk of the that has politics-as-usual unions, leftist politicians, and their lickspittles in the media and interest groups in an uproar: Stipends for Highly Effective Teachers. In other words, districts now have considerable sums by which to introduce or expand merit pay, if they so choose. They could choose to spend no money this way and some or all on other differential pay options, or to give, as established interests want, it out on as raises on an equal basis.
Pay for performance, however, would be an option and one deservedly available for the first time in bulk for far-sighted districts. The question of merit pay researchers have poured over for decades with the bulk of research converging on it has a positive impact on outcomes if teamed with other structural reforms best implemented at the district level. The current HB 1 language does precisely this, combined with the MFP formula HCR 21 that also has passed the House.
This potential boost for merit pay as a significant feature in at least some Louisiana districts – presuming this stays in the budget all the way through crossing Landry’s desk – should encourage BESE at the least to hold off any permanent pay raises for at least a couple of years and the Legislature to keep the annual stipend, which would make for good sense as well with budget uncertainties ahead. This could act as a pilot study that could guide incorporating this into the MFP after some years down the road.
It's an exciting possibility to help improve Louisiana’s woeful, if improving, educational outcomes, and if things remain the same throughout the legislative process finally made available with state dollars for significant application.
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