Teacher pay continues to be much in the news lately. Last week the North Carolina House Committee on Education Reform adopted a report that said teacher pay in the state is not keeping up with the cost of living and North Carolina isn’t doing enough to attract and retain quality teachers.  Then earlier this week members of the State Board of Education received a report that found teacher attrition up significantly in North Carolina and the state is struggling to find new teachers.

Both developments set off the usual discussion about the need to raise teacher salaries.

That may help but doing so may only continue to ignore an ever-growing problem: the rising cost of teacher benefits. In 2012-13 the average teacher salary was $45,737. The value of the benefit package (health insurance, retirement and social security) was $15,243, for a total compensation package of $60,980. Fast forward to 2022-23, average teacher salary was $57,805, the value of benefit package increased to $25,981, while teacher compensation rose to $83,786.  During that time, the total cost of benefits the state pays to K-12 public school educators increased from $2.4 billion to $4 billion.

One of the biggest drivers of those increases are the yearly increases in the state contribution for retiree benefits. Ten years ago, the state contribution was 14.23 percent of the annual salary. Today, that percentage is over 25 percent of annual retiree salaries.

Yes, higher salaries may be part of the solution to solve some of the problems North Carolina faces. Because more and more dollars are going to benefits and not teacher pay, policymakers would be wise to make the rising cost of benefits part of the discussion.

Source: Highlights of North Carolina Public School Budget for various years. Published by North Carolina Department of Public Instruction. Calculations are the author’s.