New Principal Pay Plan Could Result in Steep Salary Reductions for Veteran Principals

Photo Credit: WRAL

By Lindsay Wagner

State Board of Education members expressed shock this week upon learning just how seriously the General Assembly’s newly enacted principal pay plan could hurt school leaders, particularly those who have devoted decades of service to the state’s public schools.

“I don’t think it was anybody’s intent for principals to lose pay as a result of [this plan],” said the State Board of Education’s vice chairman A.L. “Buddy” Collins. “I have three different principals who are very veteran principals with over 30 years who believe they are being adversely affected to the point that they may need to retire—which is certainly not what we want.”

North Carolina’s principals, whose salaries ranked 50th in the nation in 2016, watched this year as lawmakers changed how they are compensated, moving away from a salary schedule based on years of service and earned credentials to a so-called performance-based plan that relies on students’ growth measures (calculated off standardized test scores) and the size of the school to calculate pay.

But the plan’s design has produced scenarios that result in some veteran principals conceivably earning as much as 30 percent less than what they earned on the old  pay schedules—prompting some to consider early retirements.

“I just want to point out this one principal who wrote to me,” said vice chair Collins. “He’s got 35 years of experience, 58 years old…and he’s expecting to have his salary reduced by 30 percent next year. And I’ve got two others with greater [amounts] of experience with a similar result.”

Under North Carolina’s new principal pay plan, this school leader could see a reduction in her annual salary by nearly $20,000 next year. (Credit: Department of Public Instruction, Financial and Business Services Division)

For the current 2017-18 school year, principals who find themselves earning less than what they would have under the old plan can rely on a “hold harmless” provision lawmakers enacted for this year only that prevents them from a reduction in salary.

But next year that provision expires, and unless the General Assembly takes action to extend this hold harmless provision, either local school districts must come up with extra funds to pay those veteran principals, watch them prematurely retire—or watch those school leaders’ salaries take a nosedive.

Early to mid career principals generally do well with the new plan—at least to start. But in this week’s presentation to the State Board, the Department of Public Instruction’s school business director, Alexis Schauss, outlined a few scenarios in which high performing early career principals can anticipate a very volatile pay schedule going forward, where fluctuations in salary could vary year to year by as much as $10,000 or more, depending on their students’ test scores.

The new plan appears to create a disincentive for school leaders to take on the challenge of heading up low-performing schools, said Amanda Bell, a Rockingham school board member and advisor to the State Board.

“It is going to be almost impossible for us to find principals who would even want to take on that challenge,” said Bell. “Because eventually they’re gonna lose salary, based on this model.”

Board member Tricia Willoughby repeatedly questioned who designed the principal pay plan.

“When I get the phone call from our local superintendent about this, or from some of my friends who are principals, I want to know specifically who designed this [principal pay plan] and who I can tell them to call,” said Willoughby. “I want to know who designed it, and we may not get that answer today, but I’d like an email in the next day or two [explaining] to whom I refer these questions.”

Ultimately, said vice chair Collins, it’s up to the State Board of Education to explain to the General Assembly that its new principal pay plan includes unintended consequences that include steep losses in pay for veteran principals and a complex bonus system that may disincentivize talented principals from taking up the helm at struggling schools that need them.

But Board members would need expert help from DPI’s financial staff in order to convey these issues to the General Assembly.

“I’m a little concerned that the Superintendent indicated that perhaps our financial staff didn’t have the time to do this,” said Collins, expressing his fear that State Superintendent for Public Instruction Mark Johnson, with whom the State Board has had a contentious relationship since his election last year, did not see this issue as a priority.

“If this needs to be a motion, I can make a motion,” said Collins, pressing Johnson on whether or not he intends to marshall resources toward this issue.

“I do believe, as head of the agency, you should make a motion if that is what you want to direct staff to do,” responded Superintendent Johnson to Collins’ remark.

“I move that we direct the Department of Public Instruction and our State Superintendent to provide the necessary information to the General Assembly to correct any unintended consequences of legislation regarding principal pay,” said Collins, which quickly garnered approval by the Board.

Board member Eric Davis said he was grateful to the General Assembly for attempting to fix the principal pay schedule because it was not where it needed to be.

But, Davis added, “these issues are complex and they’re not easy to solve,” he said. “The General Assembly really needs a partner called DPI, who understands the implications of various legislative proposals and can prepare expert advice on the outcomes that might result.”