To assist in addressing the disparities in teacher salaries within the state and compared to surrounding states, the legislature created the Teacher Salary Equalization Fund to provide public school districts and open-enrollment charter schools with additional funding dedicated to increasing teacher salaries. Equalization funding is provided to districts and charter schools that have an average annual teacher salary below the statewide target average annual salary set by the legislature. This target average is a statewide measure, not an expectation for each district or charter school. Equalization funding is continuous and will increase if a district’s ADM increases. The legislature may also increase the state target average and the amount of per-student funding as part of the adequacy review process, which will increase the amount of funds districts will be eligible to receive. Funding will not decrease below the amount a district receives in the initial base year even if ADM decreases.
The goals of the legislature in providing equalization funding include:
- Regular increases in the state average salary,
- An improved state ranking for average salary among SREB states,
- A continuous reduction in the gap between the highest and lowest average salary and starting salary in the state,
- Lowering the rates of teacher attrition, and
- Increasing the number of districts with a starting salary above the minimum required by statute.
In order to achieve these goals, at a minimum, districts and charter schools should use equalization funds to meet or exceed the state minimum salary requirements in Ark. Code Ann. 6-17-2403 each year. Districts and charter schools may also use equalization funds to increase or add to local minimum salary schedules and for salaries and benefits paid out of the teacher salary fund. One-time salary payments are not the preferred use of equalization funds to meet the intended purpose and goals of the legislature but are allowable. One-time payments should be coupled with other strategies or a plan for long-term increases to teacher compensation.
Districts must use all equalization funding for teacher salaries and benefits each year and not carry over funds. Districts will be required to notify DESE of how equalization funds are used for reporting to the legislature.
Upon receipt, equalization funds must be transferred into fund 1 using the following codes:
- 69314 Transfer to 1000 for Teacher Salary Equalization Program From 2001 to 1000 ONLY - must equal rev 52204.
- 32204 Teacher Salary Equalization Program (receipt to fund 2001 only for Teacher Salary Equalization Program – FIN-21-043)
- 52204 Rev Transfer into fund 1000 from fund 2001 for Teacher Salary Equalization Program. (Transfer out 2001520000000000 69314 must equal transfer into fund 1000 52204)
Whether a district qualifies for equalization funding in 2021-22 is based on the average teacher salary reported in the 2019-20 ASR, less National Board bonuses. The amount of funding is calculated as $185 multiplied by prior year three-quarter ADM. (See figure below.)