Proposed K-12 Salary Increase Likely to Have Major Local Fiscal Impact

December 17, 2021

As part of his “Thank you, Virginia” tour, Governor Northam announced on December 6 that his outgoing two-year budget proposal will contain a 10 percent pay raise for teachers, the largest in 15 years. The amount proposed to be set aside for the state share of these raises in General Funds is $246,955,292 the first year and $508,788,035 the second year. As has been the case with previous pay raise incentives from the state, local funds will need to be provided to access the state share of these increases. The estimated local share of this compensation supplement would be $198.7 million in FY 2023 and $409.9 million in FY 2024. These figures are only for instructional and support positions recognized under the Standards of Quality, and as such, the costs for providing a compensation supplement to all actual K-12 employees would be higher. For many localities, this can be challenging as they are already funding the costs of K-12 education at levels well beyond the amount at which they are required.

According to the Virginia Board of Education’s (VBOE) 2021 Annual Report on the Condition and Needs of Public Schools in Virginia, local governments are providing substantial shares of K-12 funding. The report found that in Virginia:

  • Local governments invest approximately $4.4 billion beyond their required local effort.
  • Local governments provide the majority (55%) of overall K-12 funding, while the state contributes 40% of public-school funding, with 6 percent from federal sources.
  • From 2008-09 to 2018-19, the state’s share of total funding has decreased. Local governments have taken on a larger share of funding.

The fact that local governments continue to provide a greater share of funding causes inequitable resources and opportunities for low-income students. In aggregate, the state funds 55% of Standard of Quality costs, while localities fund 45%. However, as the data from the Annual Report suggests, localities are funding a far greater share for the “true costs” of education. Furthermore, the state’s method of calculating prevailing statewide teacher salary costs does not reflect the simple average and yields a prevailing cost figure actually lower than the simple average. Efforts by the Governor and the General Assembly to increase teacher compensation must take these facts into consideration.

According to VBOE’s Annual Report, like much of the nation, Virginia continues to face a shortage of educators entering and remaining in Virginia’s public schools. This shortage predated the pandemic but is likely to be severely exacerbated by it for years to come. This decline is correlated with low teacher salaries, and challenging working conditions. As expected, salary and earning potential play a role in career choice selection. As of 2019-2020, Virginia ranks 26th in average salary for K-12 public school teachers, and 26th in average salary for K-12 public school instructional staff. According to the National Education Association’s Rankings of States 2020 report, the average teacher salary in Virginia is $57,665 while the national average is $64,133. Comparing teacher salaries to those of other college graduates, Virginia is 50th in the nation.

The Governor’s budget proposal stipulates that the state will provide the state share of up to a 5 percent salary increase effective July 1, 2022, to school divisions that certify to the Department of Education that an equivalent increase will be provided to instructional and support personnel the first year. Sufficient funds are appropriated in this act to finance, on a statewide basis, the state share of up to an additional 5 percent salary increase effective July 1, 2023, to school divisions that certify to the Department of Education that an equivalent increase will be provided to instructional and support personnel the second year. In order to access these funds in FY 2023, a school division must provide at least an average 2.5 percent salary increase the first year. In order to access these funds in FY 2024, a school division must provide at least an average 2.5 percent salary increase the first year and at least an additional average 2.5 percent salary increase the second year.

VACo supports voluntary incentives that encourage localities to increase teacher salaries to reflect the national average in compensation, as long as this is done without a required minimum local match. Former VACo President Jeff McKay reiterated this point during the 2021 General Assembly session. As Governor-elect Glenn Youngkin and the General Assembly consider amendments to Governor Northam’s budget proposal, VACo encourages its members to ask their legislative delegations for maximum local flexibility to fund K-12 salary increases.

VBOE’s full 2021 Annual Report may be viewed here.

VACo Contact: Jeremy R. Bennett

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