More “Unraveling”: The General Assembly’s inability to craft performance pay plans for educators

Tomorrow, January 30, NC Policy Watch is presenting a Crucial Conversation with myself, Kris Nordstrom, and State Senator Jay Chaudhuri. We will be discussing the current class-size crisis, and how North Carolina has lost its way when it comes to public school policymaking. Tickets for the event, which is co-sponsored by Public Schools First NC and Save our Schools NC, can be found here.

Last month, the Justice Center published The Unraveling, a report detailing how seven years of inept policymaking has hurt North Carolina’s public schools. The report takes a detailed look at the General Assembly’s major education initiatives in each of the past seven years. As the report shows, this period has been dominated by a series of not just bad policies, but bad policies that are incredibly poorly crafted. In nearly every case, the major education initiatives of the past seven years have been both:

  1. Based on very questionable evidence; and
  2. Crafted haphazardly, ignoring best practices or lessons learned from other states.

These problems stem from the General Assembly’s approach to policymaking. Over the past seven years, almost all major education initiatives were moved through the legislature in a way to avoid debate and outside input. At the same time, the General Assembly has abandoned its oversight responsibilities and avoided public input from education stakeholders. The net result has been stagnant student performance and increased achievement gaps for students of color and low-income students.

One topic not included in The Unraveling was the General Assembly’s shambolic efforts to create performance pay plans that link educator pay to how their students perform on state tests. These efforts – while not confined to a given budget year – reinforce the findings of the report. In other words, the General Assembly’s efforts on performance pay have been based on questionable evidence and further hampered by an inability or unwillingness to govern effectively. Below, please read about the history of these efforts, which further highlight the General Assembly’s seven years of failed education policy.

Performance pay plans

Throughout the past seven years, the General Assembly has also taken a number of half-hearted stabs at developing a statewide performance pay plan. There is little evidence that such plans improve student learning or the recruitment and retention of high-quality teachers. Additionally, development of such plans requires careful technical work and buy-in from stakeholders. To date, few, if any states have successfully implemented a statewide performance pay scheme for teachers or principals. Not surprisingly, North Carolina’s efforts to implement statewide performance pay plans have mostly failed.


In 2012, the General Assembly solicited school districts for performance pay plans. The hope was that school districts or members of the public would submit performance pay plans that could be adopted for statewide implementation. Only 17 of 115 North Carolina school districts submitted plans. The plans were never reviewed in any committee and have never served as the basis for any state performance pay proposals.


The General Assembly’s 2013 effort to implement performance pay hinged on the idea that teachers would be willing to forfeit career status in exchange for a raise of $500. The budget language required superintendents to spend the 13-14 school year, reviewing the performance of all district teachers who have been employed by the district for at least three years. The subsequent year, superintendents were to offer the top 25 percent of these teachers the option of forfeiting career status in exchange for a guaranteed raise of $500 in each of the next four years. The General Assembly set aside $10.2 million in FY 14-15 for this plan.

No compensation was offered to other teachers. The legislation simply eliminated career status for these teachers. The legislation was silent on what criteria superintendents were to use to judge performance, leading to widespread confusion on how to assess teachers in non-tested subjects.

Ultimately, litigation halted the implementation of this half-baked plan. The courts concluded that the state cannot rescind career status for teachers that had already earned it. The subsequent year’s budget eliminated the recurring appropriation for this failed performance pay effort. The $10.2 million that had been set aside simply went unused, and ultimately was returned to state coffers.


Once again, the General Assembly attempted to implement performance pay plans without putting in the hard work of designing or funding such a plan. Section 8.41 of the 2014 budget asked school districts to submit their own performance or differentiated pay plans. These plans were to be funded via the newly formed North Carolina Education Endowment Fund (NCEEF) and an appropriation of just $1 million.

The NCEEF was the primary education initiative of Lt. Governor Dan Forest. His theory was that the sale of specialized license plates and donations from private industry would generate sufficient revenue to fund performance pay plans for teachers. Lt. Governor Forest desired the NCEEF to be funded to the extent that statewide performance pay plans could be financed simply from the NCEEF’s interest. The smallest annual appropriation to North Carolina’s previous statewide performance pay plan, ABC Bonuses, was $70 million (actual expenditures ranged from $67 million to $139 million). For the NCEEF to generate $70 million per year in interest, the state would need to sell 70 million “I Support Teachers” license plates to generate approximately $1.4 billion in revenue. There are 7.3 million licensed drivers in North Carolina. In other words, every licensed driver in the state would need to purchase almost ten specialty license plates in order to generate the revenue envisioned by the Lt. Governor.

Despite an active marketing campaign from the Lt. Governor’s Office, they were unable to collect the requisite 500 signatures to begin the production of the specialized plates. As of May 31, 2016, donations to the NCEEF had generated a mere $84,554.

Ultimately, 76 school districts submitted pay plans to the General Assembly. These plans were never reviewed, funded, or implemented. While the NCEEF still exists, it is now being used to fund a new scholarship program for prospective teachers via appropriations from the General Assembly.


By 2017, the General Assembly had abandoned talk of implementing a statewide teacher performance pay plan. Prior to the 2017 budget, principals were paid according to a schedule that provided additional pay based on the principal’s years of experience and the size of the school led by the principal. Under the plan created by the 2017 budget, principals would instead be paid according to the size of the school and the school’s performance on the state’s standardized tests.

Critics have noted several issues with the plan:

  • It is based off the unlikely premise that principals will work harder to improve student test scores if their salary is based on student test scores
  • Tying principal pay to school performance may deter principals from moving to low-performing schools
  • It creates situations where assistant principal or teacher salaries may be higher than the principal’s salary
  • The complicated hold harmless provisions, the timing of receiving school performance results, and reduced staffing levels at DPI make it extremely difficult to verify principal salaries

Many of these issues could have been avoided if the General Assembly had consulted with experts at DPI. Unfortunately, the agency was never given the opportunity to weigh in on the proposal.

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