In November, our children’s high school principal announced he’ll retire at the end of the year, after 16 years of service. I was shocked, but shouldn’t have been. After nearly two years of chronic upheaval and conflict in public education as a result of the COVID-19 pandemic, I can only imagine how attractive retirement must seem.
Our principal is not alone. In the 2020-2021 academic year, 44 percent more teachers here in Michigan retired in the middle of the school year than in the prior school year. And schools face staffing shortages for not only full-time teachers but substitute teachers, teachers’ aides, bus drivers, and food service workers.
The “Great Resignation” appears to have reached our public education workforce, if not the entire country’s. The situation has grown so dire that schools are closing or educating children remotely for days at a time, not due to the pandemic-related health risks but because of staffing shortages.
And this problem won’t end soon: The Michigan Department of Education reports enrollment in teacher preparation programs fell by nearly half from 2013 to 2019, and that was before the pandemic.
Michigan’s Superintendent of Public Instruction proposed a number of measures to help. While he didn’t mention tax incentives, other states have considered tax credits or exemptions to help keep educators or recruit new ones.
Georgia: This year Governor Brian Kemp signed into a law a teacher recruitment and retention income tax credit. Educators who teach high-need subjects in 100 rural or low-performing schools can claim a $3,000 income tax credit for up to five years. The law went into effect on July 1, so it’s too soon to tell whether it is working.
Illinois: Last year, a state senator proposed a non-refundable Teacher Recruitment and Retention Educational Tax Credit of up to 50 percent of unreimbursed tuition costs. Teachers who started in 2021 or later and stayed for five consecutive years would be eligible. The proposal still is pending.
California: In 2017, lawmakers tried to pass a measure to exempt teachers who worked in public schools at least five years from paying state income taxes and to provide tax credits for education students. The bill died after then-Governor Jerry Brown said the state could not afford it.
Teachers also can claim a federal education expense tax deduction of up to $250, even if they don’t itemize. And in 2018 the Center for American Progress proposed a $10,000 federal tax credit for teachers in high-poverty schools.
What does the research say? Not much, unfortunately.
Researchers in the United Kingdom reviewed more than 120 international studies to learn which teacher recruitment and retention strategies were most effective. They concluded targeted financial incentives such as scholarships, tax-exempt grants, or wage subsidies can encourage people to start teaching. But the incentive needs to be large enough to compensate for the disadvantages of working in certain schools and enough to compete with more lucrative occupations.
They also found that these incentives failed to improve teacher retention. Continuing professional development and early career support may be more promising but the evidence is weak. The researchers found no robust studies showing long-term benefits from any other approaches.
What does a teacher say?
According to the National Center for Education Statistics, the median salary of a public school teacher in the US is $63,645. Their average age is just over 42, and three quarters are women.
I asked a friend who has taught for 20 years and who nearly fits that profile whether she thought a tax incentive could help retain teachers.
Her answer: “Nope.”
She identified two reasons. First, she feels teachers have been victims of criticism from all sides since long before COVID-19. And she said “the huge benefits I had—stability, pension—have been taken away. Sadly, that means we’ll be getting lower and lower caliber recruits… The payoffs for those with better qualifications to choose teaching over other jobs are mostly gone.”
If targeted financial incentives work in the short-term, maybe a tax credit for substitute teachers are an option. But it would be a lot easier to pay them a higher daily rate or temporarily waive certain accreditation requirements .
Keep in mind, hiring and retaining teachers is not the only labor problem state and local governments face. These same issues plague every public employment sector. Would tax credits work for firefighters, emergency medical service workers, social workers, or police? If they did, would they also only be effective in the short-term?
A recent public radio story explained why public sector employment is recovering so slowly: “Budget uncertainty, challenging work environments, and a desire for flexibility all have an impact…” Like all employers, state and local governments are competing in a hot labor market. And in some regions, housing costs have risen quickly because of pandemic-induced changes in where people work and live.
In other words, taxpayers and lawmakers need to think beyond tax subsidies. When it comes to public services and the people who provide them, we get what we pay for.
We just have to decide what we want.
The Tax Hound, publishing once a month, helps make sense of tax policy for those outside the tax world by connecting tax issues to everyday concerns. Have a question or an idea? Send Renu an email.
