Teacher Pay Changes on the Horizon

House Bill (HB) 2 is headed to the governor’s desk for signature, and districts — especially those with a July 1 fiscal year start — are eager to determine how best to comply with compensation-related changes.

Note: The bill includes many other changes, and TASB HR Services will release more information and guidance on these topics at a future date.

Teacher Pay Changes

HB 2 directs $8.5 billion in a variety of ways to public schools with specific language for pay increases subdivided to address teacher compensation and compensation for other staff who are not administrators. The effective date of implementation is set for September 1, 2025, for the 2025-2026 school year.

Compensation-related items include the following:

• $4.2 billion will be provided for teacher compensation through a new teacher retention allotment. Districts will be required to provide teacher compensation as follows:
• For districts with 5,000 or fewer students
  • $4,000 for teachers with three and four years of experience
  • $8,000 for teachers with five or more years of experience
• For districts with more than 5,000 students
  • $2,500 for teachers with three and four years of experience
  • $5,000 for teachers with five or more years of experience
• $500 million will be provided for non-administrative staff pay raises provided through a $45 per student adjusted average attendance. These pay raises are designed for teachers who are not eligible for the retention allotment (i.e., teachers with zero, one, and two years of experience), counselors, librarians, nurses, teacher assistants, custodians, food service staff, bus drivers, administrative assistants, and other support staff.
• $1.3 billion for a new fixed cost allotment provided on a $106 per enrolled students basis to help pay fees for hiring retired teachers, health insurance premiums and other employee benefits, and needs of the district such as utilities, transportation, etc.

Additional Bill Language

Additional items of note in the bill related to pay increases include:

• Bill language that clarifies increases granted to comply with the bill are not gifts of public funds and do not violate contract law.
• The definition of “classroom teacher” includes uncertified teachers who otherwise meet the definition of teacher and anyone who has entered into a contract with a district who otherwise meets the definition of teacher.
• The obligation of the district to increase the salary for each classroom teacher by the allotment received. One-time payments, other than corrective payments as described below, will not comply.
• Districts that don’t meet the spending requirement in 2025-2026 can comply by giving a one-time bonus in 2026-2027 equal to what the employee should have received in 2025-2026.
• Ensures districts that currently have an enrollment of 5,000 or fewer students and that subsequently increase in enrollment will retain their higher-value allotment.

Next Steps

As districts wait for the official signature from the Governor and additional guidance from the state, they can prepare for teacher pay changes by considering the following:

• No retention allotment will be provided by the state for non-teachers who currently are on the teacher pay scale. Districts will either need to fund comparable increases from existing district funds, or non-teachers should be removed from the teacher pay scale and paid within a different pay structure.
• The significant salary increases starting at year three on the teacher pay scales will create a large gap at certain years of experience. Districts may want to adjust years zero through two using existing district funds to help smooth out pay differences in the structure and ensure teachers at those years are receiving a comparable pay increase.
• Significant teacher pay increases funded by the state do not consider other teacher-adjacent positions, such as instructional coaches, interventionists, and other student-facing positions, nor do they address the educator career pathway. Districts should consider prioritizing adjustments for others in the educator career pathway to limit the negative impact on staff who have progressed into higher level positions related to instruction.
• Districts will need to decide how to fund other nonteacher positions either from additional allotment of funds provided by the state or from local existing funds.

Stay tuned to TASB News and Insights for additional information as HB 2 changes go into effect. TASB HR Services is closely monitoring and will publish implementation guidance as soon as possible.