Idea to Hike Detroit Teacher Pay Could Cost $462 Million

A Detroit businessman’s idea to attract talent to the city’s public schools by paying teachers between $125,000 to $150,000 could cost close to half a billion dollars every year. If superimposed on the school district’s current salaries and the state’s pension system, it would add up to $462 million to the Detroit school district’s $642 million annual operating budget, a 72 percent increase.

Peter Karmanos, who founded Compuware and is the owner of the NHL’s Carolina Hurricanes, offered the idea on Charlie Langton’s radio show.

According to the most recent state records, there were 3,677 teachers in the Detroit Public Schools district earning an average of $57,758 a year. To boost that average to an across-the-board $125,000 salary would cost an additional $247 million. Paying all teachers $150,000 per year would require an extra $339 million.

That would not be the end of the increase in the obligations DPS would face, however. Those elevated payrolls would also make the district responsible for much higher contributions to the underfunded state-run school pension system. These expenses tack another $90 million or $123 million to the cost of paying Detroit teachers $125,000 or $150,000 salaries.

Karmanos suggested that his preference was for a school system run by the mayor, paying these kinds of salaries and operating differently in other ways, too.

“You’d have to make it one of the more esteemed jobs around, they would have to be recognized for being teachers, and you would have to insist that people who sent the kids to your public school system would have to spend some time on those kids’ education,” Karmanos said.

Gary Naeyaert, the executive director of the Great Lakes Education Project, also says the most effective teachers in Michigan should make six-figure salaries. But he references one shortcoming in the status quo Detroit system that makes the idea problematic: Determining which teachers are effective.

The Detroit school district finished last nationwide among urban school districts in reading and math in the recently released 2015 National Assessment of Education Progress, called “The Nation’s Report Card.” Yet this same school district also gave nearly 80 percent its teachers the top rating possible — “highly effective” — according to the most recent state data, from 2013-14.

“You can’t have an evaluation system that ranks everyone as ‘highly effective’ and then pay them that way,” Naeyaert said.

Under Naeyaert’s ideal, teachers whose students show 1.5 years of growth compared to their peers on standardized tests over a year would be the ones getting six-figure salaries.