By Michael Gonzales, Ed. D.
Professional Educators of Tennessee – Local Leader

When your employer gives you a 4 percent raise, you can easily calculate the dollar amount of the raise by taking your hourly wage or annual salary and multiplying it by the raise percentage. That is the case unless you are a public educator. For public educators, it is impossible to calculate a state raise by multiplying your salary by 4 percent. In fact, it is impossible for teachers to calculate their raise—until it shows up in their paycheck! And then sadly, the raise will always be a lesser percentage than the percentage given by the state.

Why is it that teachers cannot calculate their state raise, and why do teachers never receive the full percentage amount of the state raise?  The answer has two factors: (1) Tennessee’s funding formula for education, the Basic Education Program, more commonly known as the BEP; and (2) the allocation of BEP instructional funds by the local school systems.

To understand how the state calculates a state percent raise, you must first understand what a salary unit cost is and how it is used to calculate teacher raises.  The BEP Blue Book defines the number of instructional positions (teachers, principals, guidance counselors, and others) needed to provide a basic education.  A BEP-generated position, also known as a unit, is assigned a cost, which is a known salary dollar amount, resulting in the term salary unit cost.  All BEP-funded instructional positions are funded equally using a single dollar amount (salary unit cost) regardless of years of experience and degree(s).  One (1) BEP instructional position (unit) is equal to \$48,330.00 (one salary unit cost).  A state raise is calculated by multiplying the salary unit cost by the raise percentage, and so \$48,330.00 x .04 = \$1,993.20.  The new salary unit cost is now \$50,263.20.

The BEP calculates the number of BEP-funded positions for a school district based on average daily membership (ADM), which is a measure of student enrollment used for calculating per-pupil funding and determining the number of BEP-funded positions in a school district.  The amount of instructional funding is calculated by multiplying the number of BEP-funded positions by the salary unit cost, \$50,263.20.  Example: 100 BEP-funded positions in a school district x \$50,263.20 salary unit cost = \$5,263,200.00.

Funding for \$5,263,200.00 is shared between the state and the local school district. The percent share is 70 percent funding by the state and 30 percent funding by the local school district.  A school district’s fiscal capacity, which is a school district’s ability to fund the 30 percent, is determined by the state and may result in a ratio different from the 70/30 percent ratio.  Using the 70/30 percent ratio, the state funds \$3,684,240.00, and the school district funds \$1,578,960.00.

The percentage raise is further reduced when school districts allocate their instructional funds. The reduction in the raise percent received by teachers is driven by two factors: (1) school districts employ more instructional staff than funded by the BEP, and (2) school districts have the option to redirect the money allocated for raises if the school district meets certain requirements.

Factor One: The school district employs more instructional personnel than the number of positions calculated by the BEP. This is because the school district needs additional employees as a result of unfunded or underfunded mandates (requirements) placed upon the school district, and/or the BEP ratio for calculating instructional personnel does not provide an adequate number of instructional personnel, and/or other causes.

Using the previous example, the school district received \$5,263,200.00 in instructional funds for 100 instructional personnel but employs 125 instructional personnel.  School district’s typically include all instructional personnel in the pay raise because how do you justify not giving a raise to a non-BEP- funded position that is an equivalent job to a BEP-funded position?  \$5,263,200.00 divided by 100 equals \$52,632.00.  \$5,263,200.00 divided by 125 equals \$42,105.60. \$42,105.60 is less than \$52,632.00, which results in a lower percent state raise.

Factor Two: If a school district meets or exceeds the state salary threshold, instructional funds (raises) can be allocated to other instructional benefits. One example: school districts have the option to hire new personnel rather than give a raise in order to comply with the unfunded or underfunded mandates.  This avenue will reduce the state raise percentage received or eliminates it entirely.

Instructional personnel truly do not know what their state raise percent is until they receive their paycheck, and it is always less than the raise percentage given by the state.