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REL Midwest Ask A REL Response

Teacher Workforce

April 2019


What research and resources are available on how states fund teacher salaries?


Following an established Regional Educational Laboratory (REL) Midwest protocol, we conducted a search for research reports and descriptive studies on how states fund teacher salaries. For details on the databases and sources, keywords, and selection criteria used to create this response, please see the Methods section at the end of this memo.

Below, we share a sampling of the publicly accessible resources on this topic. References are listed in alphabetical order, not necessarily in order of relevance. The search conducted is not comprehensive; other relevant references and resources may exist. For each reference, we provide an abstract, excerpt, or summary written by the study’s author or publisher. We have not evaluated the quality of these references, but provide them for your information only.

Research References

Baker, B. D., Farrie, D., & Sciarra, D. G. (2016). Mind the gap: 20 years of progress and retrenchment in school funding and achievement gaps (ETS RR-16-15). Princeton, NJ: Educational Testing Service. Retrieved from

From the ERIC abstract: “Although there has been significant progress in the long term, achievement gaps among the nation’s students persist. Many factors have contributed to the disparities in outcomes, and societal changes can explain progress, or lack thereof, over the past few decades. This is well documented in the 2010 Educational Testing Service (ETS) report ‘Black-White Achievement Gaps: When Progress Stopped’, which explored achievement gap trends and identified the changing conditions that may have influenced those trends. In this report, we extend that work by focusing on the relationship between school funding, resource allocation, and achievement among students from low-income families. We tackle the assumption that greater resources, delivered through fair and equitable school funding systems, could help raise academic outcomes and reduce the achievement gap. The goal is to provide convincing evidence that state finance policies have consequences in terms of the level and distribution of resources, here limited to staffing characteristics, and that the resulting allocation of resources is also associated with changes in both the level of academic achievement and achievement gaps between low income children and their peers. Using more than 20 years of revenue and expenditure data for schools, we empirically test the idea that increasing investments in schools generally is associated with greater access to resources as measured by staffing ratios, class sizes, and the competitiveness of teacher wages. When the findings presented here are considered with the strong body of academic literature on the positive relationship between substantive and sustained state school finance reforms and improved student outcomes, a strong case can be made that state and federal policy focused on improving state finance systems to ensure equitable funding and improving access to resources for children from low-income families is a key strategy to improve outcomes and close achievement gaps.”

Chingos, M. M., & Blagg, K. (2017). Making sense of state school funding policy. Washington, DC: Urban Institute. Retrieved from

From the abstract: “State policymakers throughout the country are enacting or considering major reforms to how they fund public schools. School funding policy is complicated, in part because districts can respond in ways that may counteract state policymakers’ goals. This report provides an overview of how state school funding policy works, including how states measure student and district needs, how funding formulas divide responsibility between state and local revenue sources, and how different components of funding policy interact.”

Cornman, S. Q. (2016). Revenues and expenditures for public elementary and secondary school districts: School Year 2012-13 (fiscal year 2013) (NCES 2015-301). Washington, DC: National Center for Education Statistics, U.S. Department of Education. Retrieved from

From the ERIC abstract: “This First Look report introduces new data for national and state-level public elementary and secondary revenues and expenditures for fiscal year 2013 (FY 13). Specifically, this report includes findings from the following types of school finance data: (1) revenue and expenditure totals; (2) revenues by source; (3) expenditures by function and object; (4) current expenditures; and (5) current expenditures per pupil. The expenditure functions include instruction, instructional staff support services, pupil support services, general administration, school administration, operations and maintenance, student transportation, other support services (such as business services), food services, enterprise operations, and total current expenditures. Objects reported within a function include salaries, employee benefits, purchased services, supplies, and equipment. The finance data used in this report are from the National Public Education Finance Survey (NPEFS), a component of the Common Core of Data (CCD). State education agencies (SEAs) in each of the 50 states, the District of Columbia, and the 5 U.S. Island Areas of American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands report these data annually to NCES. The NPEFS instructions ask SEAs to report revenues and expenditures covering prekindergarten through high school public education in regular, special, and vocational schools; charter schools; and state-run education programs (such as special education schools or education programs for incarcerated youth). The source for the data and findings included in this report is the FY 13 NPEFS provisional (version 1a) data file. Provisional NPEFS data have been subject to at least two rounds of extensive data review and editing; the data may also include revisions made by SEAs in their own review of their finance data that were submitted prior to the close of the collection period. Revisions submitted after the provisional data file has been locked will be incorporated in the final file for each fiscal year, which will be released at the same time as the release of provisional data for the following year. The purpose of a First Look report is to introduce new data through the presentation of tables containing descriptive information. The selected findings chosen for this report demonstrate the range of information available when using NPEFS. The selected findings do not represent a complete review of all observed differences in the data and are not meant to emphasize any particular issue. While the tables in this report include data for all NPEFS respondents, the selected findings are limited to the 50 states and the District of Columbia.”

Dean, S. (2019). Addressing Indiana’s quiet teaching crisis: A sensible blueprint for progress. Chapel Hill, NC: Public Impact. Retrieved from

From the ERIC abstract: “Data about the teaching profession in Indiana make clear the potential for a full-blown public crisis unless policymakers take decisive action this year. Indiana teacher pay dropped 15 percent between 2000 and 2017 when adjusted for inflation, moving from $59,986 to $50,554—and Indiana teachers earn 17 percent less than college graduates in other fields. As a result, Indiana’s pipeline of new teachers is drying up, with a 60 percent drop in individuals entering Indiana’s teacher preparation programs from 2008-2009 to 2013-2014. Ninety-two percent of Indiana districts struggle to find qualified candidates for teacher openings. This means that as a new school year begins, administrators become willing to hire anyone into remaining slots. This situation has disastrous effects on students. On state standardized assessments, having an ineffective teacher for three years in a row can leave a student more than 50 percentile points behind peers who have excellent teachers each of those years. This report describes how to address Indiana’s quiet teaching crisis by improving teacher recruitment, preparation, on-the-job development, and retention. The ideas and recommendations are based on a recent survey and focus groups with Indiana teachers that were administered by Stand for Children Indiana and Teach Plus Indiana; information on educator trends at the state and national levels; and cross-sector knowledge about talent strategy. The report identifies core challenges that Indiana must address to attract and retain teachers who lead their students to great results. It explains how career ladders can overcome many of these challenges, and it details three recommendations for legislative action: (1) As in such states as Oklahoma, which last year invested more than $400 million in teacher pay, Indiana should initiate a meaningful increase in funding for teacher compensation to become comparable with other professions and competitive with surrounding states; (2) For districts to receive this increased funding for compensation, state leaders should require them to develop well-designed career ladders and provide state-sponsored technical assistance to support successful transition to the resulting school management structure; and (3) To improve preparation and talent recruitment, the state should make a meaningful investment to support district efforts to provide teachers-in-training with a paid, full-year residency.”

DeGrow, B. (2017). How school funding works in Michigan. Midland, MI: Mackinac Center for Public Policy. Retrieved from

From the ERIC abstract: “Discussions about school funding can create more confusion than clarity. Each state has its own intricacies and peculiarities. Michigan is no exception. Funding flows down from different sources, often based on different formulas and intended for different purposes. There’s no one unified system that controls school funding — rather, schools rely on a number of systems layered on top of each to supply them with resources. This publication presents a brief overview of some of the key components of Michigan’s school funding system, if it can be called that. The goal is to provide a general understanding of how tax dollars reach schools and what they are intended for. Each chapter focuses on a different funding component, including the foundation allowance, state funding through categorical grants, the financing and role of intermediate school districts, special education funding, revenue for building construction and maintenance, and, finally, how federal funds work.”

Iosava, L. (2010). State education finance and governance profile: Georgia. Peabody Journal of Education, 85(1), 66–69. Retrieved from

From the ERIC abstract: “This article presents the state education finance and governance profile of Georgia. States develop educational funding formulas to determine the total amount of funds needed for each student and to establish the state’s share of those costs. Although the large majority of states use the common base or foundation formula (25 states and D.C.) or the modified foundation formula (12 states), Georgia instead uses a funding formula based on teacher allocation. Georgia is one of seven states in which K-12 formula allocates funding for education staff—teachers, administrators and support staff—as well as other costs to districts based on total student enrollment. Because of smaller class sizes in the earliest grades, funding for teachers varies depending on grade levels. Administrator positions are also funded according to enrollment. Georgia follows the second model of Common Governance in K-12 education: The governor appoints the state board of education, and citizens elect the chief state school officer. The state’s public school system is governed by the Georgia Department of Education and spearheaded by a state superintendent, elected by the public, and a Board of Education, appointed by the state governor. The State Board of Education is made up of 13 individuals, each representing a Congressional district. Both Houses of the Georgia General Assembly maintain education committees. The Georgia Department of Education is responsible for a broad array of school-related matters, including curriculum, textbook adoption, assessment, safety, health and nutrition, and busing. Georgia’s public higher education system is governed by the Board of Regents. The governor appoints members to the Board, who each serve 7-year terms. Today the Board of Regents is composed of 18 members, 5 of whom are appointed from the state-at-large, and 1 from each of the 13 congressional districts. The Board elects a chancellor, who serves as its chief executive officer and the chief administrative officer of the University System. The Board oversees 35 colleges and universities.”

Note: REL Midwest was unable to locate a link to the full-text version of this resource. Although REL Midwest tries to provide publicly available resources whenever possible, it was determined that this resource may be of interest to you. It may be found through university or public library systems.

Miles, K. H., & Katz, N. (2018). Teacher salaries: A critical equity issue. State Education Standard, 18(3), 18–22, 35. Retrieved from

From the ERIC abstract: “Quality teachers are one of the most important factors in student achievement. Yet since the recession, the real value of teacher salaries (adjusted for inflation) has decreased in the majority of states. At the heart of the teacher salary issue are growing funding inequities among the states. Some states may need to invest more in education to raise baseline levels. But it will not be enough just to throw more money at the problem. States also need to take a thoughtful look at how well and how equitably all resources are allocated. This paper examines the following issues: (1) Funding trends over the last 50 years; (2) Low salaries and teacher shortages; (3) Greater hiring challenges associated with lower pay; (4) New approaches for salary equity; and (5) How people, time, and money are allocated to create learning experiences that enable all students.”

Minnesota House of Representatives Fiscal Analysis Department. (2016). Financing education in Minnesota 2016-2017. St. Paul, MN: Author. Retrieved from

From the introduction: “The financing of elementary and secondary education in Minnesota comes through a combination of state-collected taxes (primarily income and sales) and locally collected property taxes. Revenue to school districts is received in three major categories, all of which are described in greater detail in this booklet.”

National Education Association. (2018). Rankings of the states 2017 and estimates of school statistics 2018. Washington, DC: Author. Retrieved from

From the ERIC abstract: “The data presented in this report provide facts about the extent to which local, state, and national governments commit resources to public education. As one might expect in a nation as diverse as the United States—with respect to economics, geography, and politics—the level of commitment to education varies on a state-by-state basis. Thus, NEA Research offers this report to its state and local affiliates as well as to researchers, policy makers, and the public as a tool to examine public education programs and services. Part I of this report—Rankings 2017—provides state-level data on an array of topics relevant to the complex enterprise of public education. Part II of this report—Estimates 2018—is in its 73rd year of production. Part III of this report—National Trends 2009—18—presents summary data of national trends in student enrollment and attendance, staff salaries, sources of school funding, and levels of educational expenditures in the previous ten years.”

Patton, W. (2015). Ohio schools cautiously rebuild: Uncertainty in state and local funds affects strategies. Cleveland, OH: Policy Matters Ohio. Retrieved from

From the ERIC abstract: “Policy Matters Ohio periodically surveys schools about fiscal conditions and operational strategies. The Ohio Association of School Business Officials provided a link to such a survey in their newsletter of December 2014 through February 2015. Fifty-three respondents, representing 8.6 percent of districts and including representatives from all types of districts filled out the survey. School districts are cautiously rebuilding as the state budget provides backfills for the deep cuts in FY 2012-13 and as local property values start to rise in some places. More schools are adding teachers at this point, but a third are still cutting teaching staff. Schools are adding extracurricular activities, but the practice of pay-to-play looks like it is here to stay. The Ohio High School Athletic Association reports that in 2014, 46 percent of high schools had some form of pay-to-play, with costs for sports up to $153 in some places. The percentage is about the same as in 2012. Ohio has seen four different funding formulas for classroom instruction since 2009. State aid has declined and property values remain low, keeping local revenue sources low. When superintendents face declining, stagnant or unpredictable budgets, they can’t move forward decisively.”

Verstegen, D. (2018). A 50-state survey of school finance policies and programs. Retrieved from

From the abstract: “This compendium provides state-by-state descriptions of public elementary and secondary finance policies and programs in effect during the 2017-18 school year. The report consists of two volumes. In Volume I are state-by-state descriptions across all school finance components for each state. Volume II contains separate sections for select provisions across all states, including finance formulae and cost differentials for students and districts. This includes such areas as special education, English Language Learners, and grade level adjustments. Tax and expenditure information is also included in this section. The information contained in this report is based on surveys that were completed by each State Department of Education in response to a request for descriptions of school finance programs and provisions. Thus, all information in these two volumes has been provided by the Chief State School Officer or their designee, with the exception of four states. In these states university professors or local experts filled the gaps. That information was returned for verification and correction by the State Department of Education, and changes were incorporated.”


Keywords and Search Strings

The following keywords and search strings were used to search the reference databases and other sources:

  • Compensation

  • “Funding formulas” “teacher salaries”

  • “State funding” sources

  • State revenues “teacher salaries”

  • Streams “funding formulas” “teacher salaries”

  • Summary of state school funding

Databases and Search Engines

We searched ERIC for relevant resources. ERIC is a free online library of more than 1.6 million citations of education research sponsored by the Institute of Education Sciences (IES). Additionally, we searched IES and Google Scholar.

Reference Search and Selection Criteria

When we were searching and reviewing resources, we considered the following criteria:

  • Date of the publication: References and resources published over the last 15 years, from 2004 to present, were included in the search and review.

  • Search priorities of reference sources: Search priority is given to study reports, briefs, and other documents that are published or reviewed by IES and other federal or federally funded organizations.

  • Methodology: We used the following methodological priorities/considerations in the review and selection of the references: (a) study types—randomized control trials, quasi-;experiments, surveys, descriptive data analyses, literature reviews, policy briefs, and so forth, generally in this order, (b) target population, samples (e.g., representativeness of the target population, sample size, volunteered or randomly selected), study duration, and so forth, and (c) limitations, generalizability of the findings and conclusions, and so forth.
This memorandum is one in a series of quick-turnaround responses to specific questions posed by educational stakeholders in the Midwest Region (Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, Wisconsin), which is served by the Regional Educational Laboratory (REL Midwest) at American Institutes for Research. This memorandum was prepared by REL Midwest under a contract with the U.S. Department of Education’s Institute of Education Sciences (IES), Contract ED-IES-17-C-0007, administered by American Institutes for Research. Its content does not necessarily reflect the views or policies of IES or the U.S. Department of Education nor does mention of trade names, commercial products, or organizations imply endorsement by the U.S. Government.