Press "Enter" to skip to content

Teacher Scholarship Program Doesn’t Compensate Students for Sacrificed Earnings

Governor Dennis Daugaard signed into law the critical needs teacher scholarship program Wednesday. Salvaged from the wreck of his failed 2012 education reform package, Senate Bill 233 allocates $1.5 million to pay two years of tuition and fees for college students who agree to stick around and teach in South Dakota's K-12 system for five years. At Black Hills State University, that currently equals a cash value of $14,640.

How nice. Now, students, let's see if signing up for this program makes financial sense:

State Average teaching salary Per-capita state taxation Salary in pocket after state tax Cost of living (US avg = 100) Adjusted post-tax salary power Additional purchasing power from teaching here instead of SD
IA 51528 3660 47868 96.1 $49,811 $13,876
MN 56268 4727 51541 104.4 $49,369 $13,435
MT 49999 2089 47910 102.1 $46,925 $10,990
ND 47344 3733 43611 102.1 $42,714 $6,780
NE 48931 3853 45078 94.1 $47,904 $11,970
SD 39580 3035 36545 101.7 $35,934 $0
WY 57920 3721 54199 100 $54,199 $18,265

This table uses the NEA's current average teacher salary data rather than average starting salary, for which I'm not finding updated data. So pending updates from eager readers, assume average salary is a reasonable proxy for the lower starting salaries the new teachers taking advantage of SB 233 will get. The state taxation and cost of living data come from the Governor's Office of Economic Development.

By choosing to stay in South Dakota for five years rather than taking their teaching skills to any neighboring state, students will sacrifice between $33,900 (in North Dakota) and $91,300 (in Wyoming) in real purchasing power. Even if they plunk their $14,640 in tuition savings in the bank immediately to start earning interest, after five years, SB 233 scholarship recipients will find their five-year stint in South Dakota putting them in worse financial shape than if they had simply paid their own tuition and then gone straight out of state, where they would earn enough extra income to pay off that added student debt in two years or less.

Nice try, Dennis. But the good teachers who understand basic math won't stick around for this deal.

11 Comments

  1. Michael Black 2013.03.22

    I get that teachers in other states make more money, but why would you choose to stay in SD to teach French when other places closer to Madison pay better just across the border?

  2. Steve O'Brien 2013.03.22

    Michael.

    I don't want to answer for Cory, but yours is certainly a question I ask myself more and more (especially around legislative session time). For me, I suppose it is part family ties and part being settled and having roots where where I am. With economic uncertainty, the past few years warranted staying where you have a job. After 14 years in one place (a good place to teach with strong local support) and 25 years in teaching total, one just stays. Maybe it's like the frog being slowly boiled - he (and I) just don't notice things getting worse until . . . When I started in education SD was last in pay - but not this far behind. Really it was this year when it really sunk in how far behind we have gotten ourselves.

    Michael, the better question - one that is being answered by their actions - is why would younger professionals sign up for this same ride? Fewer and fewer SD graduates are going into education. We send our best and brightest out of state. The real destructive nature of the funding (and yes, it really does all come down to funding) is that by the time our lawmakers HAVE to deal with the problem of teacher shortages and low skilled professional pools of teachers, it will be unfixable. Can SD EVER come up with the $135 + Million to dedicate ONLY to teacher salaries just to get us to tie for lowest paid? Never mind the costs to bring administrators, coaches, support staff and others up to even regional levels to compete in a market economy. It is to that concern, that the reality of how miniscule these scholarships are, must be held up to for a fair evaluation of their "market effect" to draw teachers.

    And, just keep boiling us old frogs.

  3. Steve Sibson 2013.03.22

    Cory, I went to the two links and still don't understand your table. Looks like you understated the impact of Minnesota's taxes and/or overstated South Dakota's. Did you know South Dakota doesn't have an Income Tax? And $40,000 over 9 months with liberal holidays seems like a lot when you look at those working at factories 12 months. Have a nice summer riding your bike on those government funded bike trails Cory.

  4. Steve O'Brien 2013.03.22

    Steve, against better judgement I will dive in here:
    1. I believe we all know SD does not have an income tax. Did you know that many states do not tax food and clothing (but SD does)?
    2. The 9 months is a misnomer. To be minimally fair, compare work days a year. Then to be totally fair, compare the take home work burden of those jobs as well - the length of the "work day."
    3. The implication of summers off ignores the responsibility to engage in classwork to re-certify or improve (at the teacher's expense).
    4. How many of those factory workers have a BA or MA degree? It would follow that higher salaries should go with higher education attainment. On that note, I have great respect for "factory workers." Isn't the point of education to give our children the opportunity to chose that work or to chose other professional careers? How do they get to make that choice in the absence of good schools affording them that opportunity to choose?
    5. Why do you skirt the issue Cory originally posed: the scholarships offered by the Legislature are too small to make up for the lost salaries earned by staying in SD (the condition of the scholarship). Are you willing to say those schoarships will be effective to harness market forces for the recruitment of teachers in SD?

  5. Michael Black 2013.03.22

    I agree that teachers deserve to make more money but when most South Dakota small town businesses think a $10/hour for a job is sufficient, it's hard to get those increases through.

  6. caheidelberger Post author | 2013.03.22

    Michael, I do not claim to be a rational actor in the marketplace. I posit only that a rational actor will not take the scholarship at the expense of five years of lost earning power.

    Steve, I took the tax data from the GOED website, which estimates the per capita state tax burden in each state. I assume the Minnesota per-capita tax burden includes that dreaded income tax and explains much of the $1700 more each person would pay there in state taxes. But even that plus the three extra percentage points on cost of living don't outweigh the nearly $17K larger average teacher salary.

    LK's point on teachers' hours is important. However, the factory-school room comparison is irrelevant here. College students getting a teaching certificate aren't choosing between working in a classroom or working in a factory. They are choosing between working in an SD classroom or in a ND/MN/WY/etc. classroom.

  7. Michael Black 2013.03.22

    Cory, correct me if I am wrong, but are not the teacher requirements for many state tougher than SD?

  8. caheidelberger Post author | 2013.03.22

    My impression is yes. I'll have a tough time getting a job teaching French in some places with my French minor. But many states use the same Praxis test for certification. And in terms of this scholarship, I would assume we're talking about paying the tuition of our best education students, those whose talents will make them good candidates in South Dakota or anywhere else. The point of the scholarship is not to pay for teachers who can't find a job elsewhere. The point of the scholarship is to keep the most talented new teachers from leaving.

  9. Jenny 2013.03.22

    Are SD school districts known to give their teachers annual cost of living raises? That's the least they deserve.

  10. caheidelberger Post author | 2013.03.23

    I don't know if we can make a general statement on that point, Jenny. Spearfish gave us teachers a reasonable COLA last year, around 3%, I think. Rounds, Daugaard, and the Legislature had lots of school districts freezing or reducing pay. There's not rule; it just depends on how negotiations go (between school boards and local SDEA chapters that have no real bargaining power).

Comments are closed.