State budgets are the healthiest they鈥檝e been since 2000, partly because of improved tax revenues, but also because legislators are showing more discipline in targeting spending toward their biggest priorities, according to a survey released this month at the annual meeting of the National Conference of State Legislatures.
The 46 states that responded to the survey ended the 2005 fiscal year with an aggregate balance of $35.7 billion鈥攚hich is 7 percent of their budgets. No state surveyed ended with a deficit, although Arkansas expected to end the fiscal year with a zero balance.
State revenues were 6.8 percent higher than in fiscal 2004, and rainy-day fund balances increased 14 percent to more than $20 billion compared with fiscal 2004. The states that had not passed budgets in time for the report were Alabama, Michigan, North Carolina, and Oregon.
That surplus, however, could slip in the coming years because of spending increases on Medicaid and education programs, the report says.
鈥淲hile we鈥檝e turned the corner on this budget crisis, it鈥檚 only a recent development at this point, so we鈥檙e still feeling the effects and will for a while,鈥� NCSL President John A. Hurson, a Democratic delegate in the Maryland legislature, said in a press release.
The conference, which drew roughly 7,000 state legislators, legislative staff members, policy experts, and advocates, was held here Aug. 16-20 at the Washington State Convention and Trade Center.
So far, the survey shows, states have budgeted 6 percent more in fiscal 2006 for K-12 education and 5.7 percent more for higher education than they did in fiscal 2005.
Some state leaders might be planning to use those additional revenues to revamp the way they pay teachers.
In a session here devoted to trends in teacher compensation, Eric Hirsch, the vice president for policy and partnerships at the Southeast Center for Teaching Quality in Chapel Hill, N.C., said that nine governors talked about new models for teacher compensation in their State of the State Addresses this year.
Arizona, Minnesota, and Florida, Mr. Hirsch said, have already initiated new programs鈥攎ostly in hard-to-staff schools鈥攁nd several school districts have moved out in front of their states to get something in place.
There is wide agreement, Mr. Hirsch said, that the 鈥渟ingle-salary schedule,鈥� which was designed to bring about equity among teachers, is no longer sufficient to meet the goal of having a highly qualified teacher in every classroom and to reward and retain accomplished teachers.
鈥淭he whole point of paying teachers differently should be to get teachers to do things differently so it will help kids,鈥� Mr. Hirsch said.
He added, though, that there are some important things for legislators to consider as they design these programs.
Salary alone, he said, is not enough to attract and keep qualified teachers. Non-financial incentives should also be built into these plans.
鈥淭eachers are savvy consumers of school conditions,鈥� he said, adding that officials also need to think about including mentoring programs, planning time, and other features that help improve teachers鈥� performance.
School districts also need flexibility within these performance-pay systems because of their different needs, he said.
He also cautioned state leaders against taking a 鈥渉eavy-handed,鈥� top-down approach. 鈥淭eachers need to buy into the system,鈥� he said. 鈥淭hey need to own it.鈥�
Policymakers, he added, also need to make sure that they are prepared to spend enough to pay for the program. 鈥淵ou better budget so that every teacher can get it,鈥� referring to the salary increases and bonuses. 鈥淎nd you have to ensure that no teacher loses dollars in the transition.鈥�
Finally, Mr. Hirsch addressed one of the biggest questions from officials and lawmakers about these initiatives鈥攚hether new salary systems can be based on student test scores.
鈥淰irtually no state,鈥� he said, has the ability to use what has become known as the 鈥渧alue-added鈥� factor in calculating teacher pay because of uncertainty over the reliability of test scores.
One pay model, he noted, requires teachers to set personal goals and to show that they鈥檝e reached them.
