AUSTIN – State officials are revamping Texas' 2-year-old merit-pay program for teachers after nearly 60 percent of the schools that participated last year – including dozens from the Dallas area – were bounced from the plan for failing to meet performance targets.

Education officials also are asking the Legislature to overlook early problems in the program and substantially boost merit-pay funding in the next state budget to $311 million a year – an increase of more than 25 percent. Total state money in the two-year budget would be $622 million.

Texas already has the largest teacher merit-pay plan in the nation. The list of nearly 1,000 schools selected for the third year of the Texas Educator Excellence Grant program showed that just 463 campuses from last year are again eligible in 2008-09.

The remaining 669 campuses from last year will have to terminate their bonus payments to teachers.

Among the schools dropped from the plan are 59 of the 90 campuses in the Dallas school district that were in last year. Most were knocked out because student test scores didn't improve as much as at other schools.

There are 18 new Dallas campuses in the program and 31 carryovers for a total of 49 this year.

State officials, reacting to the volatility in participation, are ready to recommend a fix to the Legislature next year. Teacher groups, on the other hand, said the new figures show that the merit pay effort isn't working and should be terminated.

Jerel Booker, associate commissioner for educator quality at the Texas Education Agency, said the agency plans to recommend that the TEEG program be merged into the state's other merit plan – the District Awards for Teacher Excellence – which was launched this school year. TEEG is for campuses in lower-income neighborhoods, while DATE is open to all school districts.

The merged program would begin in the 2009-10 school year.

"We want to roll both programs into one and then give participating districts the money for two years," Mr. Booker said. He said such a structure would provide more consistency and give a better picture on how merit pay affects student achievement. Supporters of the concept contend that merit pay motivates teachers and thereby improves instruction.

State teacher groups are expected to oppose the changes as well as the big funding increase proposed by state Education Commissioner Robert Scott. They cited the instability in the TEEG program as one of the reasons to pull the plug.

"Instead of putting more money in the program, it is time to examine the wisdom of putting any money into it," said Linda Bridges, president of the Texas AFT. "We are absolutely opposed to an increase [in funding]."

She argued that local districts – not the state – should be deciding whether to offer incentive pay with input from their teachers.

A spokesman for the Texas State Teachers Association said the TEEG program has turned into a "lottery," with a large number of schools jumping on and off the list every year.

"How effective can a merit pay system be when you have that much turnover from year to year, where teachers have to think what is here today could be gone tomorrow," said Richard Kouri of the TSTA.

Mr. Kouri said that if the program were working, most of the same schools would remain eligible. Just 256 schools have been in the plan for the three years it has been operating.

Senate Education Committee Chairwoman Florence Shapiro, R-Plano, a strong advocate of merit pay, said that, as the program is refined, it will work just as incentive bonuses work in the business world.

"Across-the-board pay raises for teachers do very little to produce the excellence we need in our classrooms," Ms. Shapiro said. "Teachers that rise to the top of their profession should absolutely get a reward."

She said she will resist any efforts to dismantle the plan. "This is a program that I will fight for," she insisted.

A majority of House members voted last year to scuttle the two merit-pay plans and use the money for an across-the-board teacher raise. But most of the merit-pay money was later restored in budget negotiations between the House and Senate.

State grants under the TEEG program are targeted at schools with a high percentage of low-income students. To qualify, schools also have to earn a performance rating of "exemplary" or "recognized" – the top two grades in the accountability system – or rank in the top quarter of schools in math or reading improvements on the TAKS.

Merit pay grants range from $40,000 for many elementary schools to $300,000 for some of the biggest high schools in the state. The largest grant in the Dallas school district is $240,000 for W.T. White High School.

Teachers who earned merit pay bonuses in the 2007-08 school year were supposed to receive their bonuses by this month. In the first year of the plan – the 2006-07 school year – about 52,000 teachers – one of every six in the state – got bonuses averaging $2,263 apiece. Each school decided its criteria for the payments.

Aimee Bolender, president of the Alliance AFT in Dallas, said teachers in Dallas schools remain skeptical about the state program and have seen little evidence that it is changing the practices of teachers at campuses receiving grants.

An independent study funded by the state earlier this year indicated that while the bonuses were popular, 85 percent of teachers at schools with incentive pay said it didn't affect their work in the classroom.

"We know what works in schools, things like quality professional development and programs that encourage teamwork among teachers. Throwing money at a few people is not the answer," she said. "Merit pay is not going to improve our schools."

A look at the two plans that make up Texas' teacher merit pay program:

TEEG: Texas Educators Excellence Grant plan is for teachers in schools with a high percentage of low-income children. No local match is required. It involved an estimated 52,000 teachers at 1,148 campuses in its first year and a similar number of teachers at 1,132 campuses this past year. Teachers received average bonuses of $2,263 in the first year, far less than the $3,000 to $10,000 range recommended by the Legislature. Bonuses for this past year are now being handed out.

DATE: District Awards for Teacher Excellence plan began this year and is open to all school districts. The grants require a local match. The plan recommends a $3,000 bonus per teacher and is designed to provide enough money to reward nearly 50,000 teachers, one of every six in Texas, for improved test scores and other signs of student achievement. Dallas and 191 other districts have signed up for the program.

SOURCE: Dallas Morning News research