	Overview

Congress has historically recognized the importance of teacher quality in improving the academic performance of elementary and secondary school students. Apart from the recently enacted Teacher Incentive Fund (TIF), federal education policy has not significantly addressed the nature of teacher compensation. Nevertheless, significant amounts of funding from several federal programs support the salaries of certain kinds of teachers, including teachers and paraprofessionals serving educationally disadvantaged students under the compensatory education program (ESEA, Title I-A), newly hired teachers under the continuation of activities provided by the Class Size Reduction program (antecedent to ESEA, Title II-A) and special education teachers (under the Individuals with Disabilities Education Act). As Congress moves to reauthorize the ESEA, proposals to leverage federal education spending to reform teacher compensation systems may receive serious consideration. This report is intended to discuss a variety of issues that relate to compensation reform and the proposals Congress may consider during ESEA reauthorization. The report first provides background on the teacher pay system, including the history behind the development of the dominant feature of this system—the single salary schedule. Second, the report discusses the basic elements of compensation reform, namely performance-based pay, competency-based pay, and service-based pay. The third section of the report describes several reform efforts that are currently underway around the country at the national, state, and local levels. Finally, the report concludes with a discussion of recent legislative action and issues for ESEA reauthorization. Criticism of the single salary schedule has undergirded efforts to implement performance-based pay plans in elementary and secondary education. Service-Based Pay

This section discusses two teacher compensation reforms that involve increased pay for teachers who fill hard-to-staff positions or take on advanced responsibilities. According to the act, the goal of these projects is to "develop and implement performance-based teacher and principal compensation systems in high-need schools." Reconsidering the Federal Role

As Congress considers education legislation, including bills to reauthorize the ESEA, proposals to leverage federal education spending to reform teacher compensation systems may receive serious attention. Meanwhile, the program authority continues to provide only minimal guidance as to how these funds should be used. In recent sessions, Congress has considered alternative approaches that would have begun to alter or expand federal support for teacher incentives and compensation reform. The FY2006 authorizing language was again used to appropriate funds for TIF under the American Recovery and Reinvestment Act ( P.L. 111-5 ), the Omnibus Appropriations Act of 2009 ( P.L. 111-8 ), and the Consolidated Appropriations Act of 2010, ( P.L.
Congress has historically recognized the importance of teacher quality in improving the academic performance of elementary and secondary school students; however, federal policy has only recently begun to address the impact of teacher compensation systems on both quality and performance. Growing concern about the dominant feature of these systems—the single salary schedule—has led to a variety of compensation reform efforts around the country. These efforts include pay-for-performance incentives that attempt to align teacher compensation more closely with student achievement, as well as other reforms that link increased pay to improved teacher competency or to service in hard-to-staff positions.
Congress provided significant support to several existing compensation reform efforts by enacting the Teacher Incentive Fund (TIF) through the Labor-HHS-Education Appropriations Act of 2006 (P.L. 109-149). The concise passage that provides program authority for TIF states that funds are intended to "develop and implement performance-based teacher and principal compensation systems in high-need schools." Little additional guidance has been provided with respect to how these reforms are to be implemented.
Subsequent congressional action to extend the TIF has left the authorizing language largely unchanged. Prior to the TIF, federal education policy had not significantly addressed the nature of teacher compensation. Nevertheless, significant amounts of funding from several federal programs support the salaries of specific kinds of teachers, including teachers and paraprofessionals serving educationally disadvantaged students, newly hired teachers, and special education teachers.
As Congress moves to reauthorize the Elementary and Secondary Education Act (ESEA), proposals to leverage federal education spending to reform teacher compensation systems may receive serious consideration. Beyond recent increases in TIF appropriations through the American Recovery and Reinvestment Act (P.L. 111-5) and the Omnibus Appropriations Act of 2009 (P.L. 111-8), Congress may also consider altering and expanding the federal role in this area. Some proposals that would make changes to the federal effort in this area received attention in recent congressional sessions. These include a discussion draft for ESEA reauthorization circulated by the leadership of the House Education and Labor Committee as well as legislation to create Innovation Districts as part of the Obama Administration's education agenda.
This report is intended to discuss a variety of issues that relate to compensation reform and the proposals Congress may consider during ESEA reauthorization. The report provides background on the teacher pay system, discusses the basic elements of compensation reform, and describes several reform efforts that are currently underway around the country. The report concludes with a discussion of recent legislative action and issues for ESEA reauthorization.