Other Current Expenses

The Foundation Program, per se, does not specifically address funding and programs in areas other than foundation units and classroom needs. It is clear, however, that school systems employee support staff in a variety of areas including central office administrators, secretaries, aides, cafeteria workers, custodians, maintenance workers, and bus drivers. In many systems the number of these persons is almost as many as the number of certified persons employed. What is the derivation of funds used to pay salaries and employee benefits in these categories?

In the annual state budget adopted by the legislature there is a funding category built into Foundation Program funding known as Other Current Expenses (OCE). From year to year this is a “floating” amount of money based on a mathematical calculation of dollars remaining after other specific needs are met. In recent years, this amount has run at around $10,400 per foundation unit. Thus, if a system has 100 foundation units calculated and funded by the state, the OCE moneys that would accrue to the system would be around $1,040,000. [In fiscal year 2007, the OCE amount has risen to $15,209.] The local system receives these dollars with no strings attached other than to support the needs of public education for the system. The local system builds these dollars into their local budget through their general fund. Most systems use the money to pay the salaries and benefits for persons employed in support areas. The dollars can also be used to pay utility bills and other overhead costs. One must also remember that local systems have a degree of local funds to pay for these ancillary expenses. Clearly, however, the state – through the foundation program – supplies a high percentage of the dollars that are in each system’s local budget for the fiscal year.

The State Salary Matrix

In conjunction with the Foundation Program initiated with the 1995-96 school year, a state “salary matrix” was established for teachers and other certified personnel. In 1998 this matrix was renamed as the State Minimum Salary Schedule.

Under the old Minimum Program, dollars were appropriated by the State Legislature for salaries under certain formulas. Reimbursement was generated based on education degrees. No adjustment was made for length of service. When the legislature passed a pay raise with a certain per cent involved, this per cent increase was added to the state base salary in the degree categories (no degree, bachelor’s, master’s and AA). No base salary existed for a doctorate. Thus, a certain per cent increase really meant an absolute amount as a per cent of the base salary rather than a percentage increase over each individual teacher salary. Local school systems generated and adopted their own salary schedules with the only required guideline from the state being that all state moneys for instruction (salaries) had to be spent on salaries. The result of this process resulted in varieties of salary schedules – especially with respect to longevity – as well as a variety of distribution in the hiring of certified personnel.

The Salary Matrix created a minimum requirement for paying teacher salaries and was devised horizontally based on the certified degree held and vertically by years of experience. The doctorate was included in the schedule. There are 8 experience steps each comprising a three-year span of time. Three years was chosen because of the transition between non-tenure and tenure status and more, importantly, because there had already been legally established a significant jump in pay from the 3rd year to the 4th year of experience. This was a remnant of the “career ladder” legislation (that was later repealed) whereby persons achieving tenure status received a 10% increase in salary plus whatever other increase might have occurred at the time.

Appropriations were made in the annual state education budget based the actual number of persons residing in each cell of the matrix. State mandated salary increases provided that the teacher would receive at least that per cent increase over the individual’s actual annual salary of the previous year. The state salary schedule was increased in each cell by these percentages. The state appropriation provides the total salary for each foundation unit based on the sum of individual placement in the various cells (32 cells). For a person employed for more days than the minimum contract, the law provided for the pro rata increased adjustment.

In the first year of implementation of the state salary matrix (1995-96) arguments were made by some local superintendents that in order to pay at least 100% on the matrix, some personnel would have to be released. It was argued in these systems that since local teacher units were still being supplied locally and since these persons would need to receive the minimum salary, local funds would need to be used to make up the difference. Since there were not enough local funds to do so, reduction in personnel would have to occur despite the system receiving 100% of the salaries from the state for all calculated foundation units. To avoid this possibility, the statute was modified to the extent that a local system – at its option – could reduce the schedule to 95% of the amounts shown. The vast majority of the systems took advantage of this provision in the law. Thus, teachers in different systems – and sometimes even in the same system – were paid a variety of amounts on the matrix – from 95% to 100% although no one could be paid less than they had been receiving prior to the enactment of the Foundation Law.

As the Foundation Law was further implemented in succeeding years, the number of locally funded units decreased dramatically with the Foundation Program picking up more of these costs. Thus, the rationale for the 95% option became less viable. In 1997-98 the law was modified by requiring that all local systems fully pay 100% of the salary matrix by the 1998-99 school year and, also, to move the local schedule at least half the distance to 100% in the 1997-98 school year. Many systems went immediately to the 100% level. For the 1998-99 school year, every new, beginning teacher with a Bachelor’s Degree was paid at least $28,082 throughout the state. The average Alabama Teacher salary rose to near $36,000 per year. Local school systems may devise salary schedules that pay more than the state schedule. With the State Minimum Salary Schedule in place, teacher salaries across the state are extremely comparable. Given that a teacher may transport experience steps from one school system to another under the statute, each school system enjoys a balanced and equitable ability to recruit teaching personnel – at least in terms of salary incentives.

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