As states face tightening budgets and schools struggle to fill critical teaching positions, most states are leaving one of their most powerful workforce tools on the table: teacher pay.

A new national analysis from the National Council on Teacher Quality (NCTQ), State of the States: Spending Smarter on Teacher Pay, finds that 32 states—nearly two-thirds of the country—offer no additional pay to attract and retain teachers in hard-to-staff schools and subjects, even as persistent shortages in hard-to-staff subjects like special education, math, and science leave students without consistent instruction. Most states (41) also fail to reward their most effective teachers, instead directing resources toward automatic salary increases tied to seniority and credentials that research shows do little to improve student outcomes.

New Jersey is one of 32 states nationally that offer no additional pay to attract or retain teachers in hard-to-staff schools or subjects. The state also fails to pay teachers more for improving student learning outcomes, a key strategy for retaining strong teachers.

Salaries and benefits account for roughly 80% of school spending and how states and districts structure that spending influences who enters the classroom, where teachers choose to work, and whether they stay. Attracting and retaining the best teachers is urgent as student achievement continues to stagnate in many states.

“Paying more for hard-to-fill positions and rewarding top performers is a no-brainer in most professions. Teaching should be no different, especially when budgets are tightening,” said NCTQ President Heather Peske. “States cannot simply spend more to build a stronger teacher workforce, but they can spend smarter by directing their dollars toward effective teachers and the schools and subjects where they’re needed most.”

Key findings

• New Jersey offers no additional pay for teachers in hard-to-staff schools — one of 38 states nationally that don’t. Only 13 states differentiate pay for teachers in hard-to-staff schools, down from 28 states in 2022.
• New Jersey does nothing to financially reward teachers who fill shortage subjects like special education, English as a second language, math, and science — one of 34 states in that position.
• New Jersey does not require districts to factor teacher performance into pay — one of 41 states where a teacher accelerating student outcomes in a high-need classroom earns the same as one struggling in the classroom next door.
• New Jersey does not require districts to pay teachers more for a master’s degree — putting it ahead of the 13 states that still tie pay to that credential, despite having no evidence of impact on student outcomes. [Ed. Note: I don’t know of any traditional district that doesn’t pay more for additional credentials. This issue is negotiated between school board members and local bargaining units.]

The stakes are especially high in schools already struggling to keep teachers. High-poverty schools and schools serving large populations of students of color experience teacher turnover rates up to 37% higher than other schools, and replacing a single teacher is estimated to cost $25,000 in larger districts.

Research shows that targeted pay for teachers in hard-to-staff schools helps bring effective teachers into those classrooms, improves retention, and raises student achievement. Incentivizing teaching in hard-to-staff subjects can shift states’ existing workforce to fill critical positions. Well-designed performance-based pay systems are also associated with increased teacher effectiveness and gains in student learning. In Texas, for example, a statewide incentive program has led to measurable gains: teachers earning top performance ratings (or “designations”) stay in their districts at rates nearly 10 percentage points higher than their peers, and districts using the program have seen average student achievement gains equivalent to roughly a third of a year of additional learning.

Rewarding effective teachers also has broad support across the political spectrum. A recent study by D. Broockman and J. Kalla (2026) found that more than 60% of voters agree that teachers should be paid more for excelling and less for underperforming. By comparison, seniority-based pay was deeply unpopular.

NCTQ recommends states make three shifts in how they compensate teachers:

• Pay more for hard-to-staff schools and subjects. Guarantee teachers in the highest-need placements at least a 7.5% salary supplement, or roughly $5,000 annually, which is the minimum threshold researchers say motivates teachers.
• Reward effectiveness. Give high-performing teachers opportunities to earn more based on transparent, rigorous evaluation criteria.
• Redirect spending from pointless credentials toward higher-impact incentives. Shift dollars from automatic salary increases for credentials such as master’s degrees toward differentiated and performance-based pay.

To see how New Jersey’s teacher compensation policies compare nationally, view the New Jersey-specific data summary.

Additional Information:

New Jersey’s Rating: ✗= Does Not Implement, ✓ = Does Implement

• Performance Pay: The state requires districts to consider teacher effectiveness when determining a teacher’s salary. ✗
• The state provides funding for districts to provide additional pay to high-performing teachers. ✗
• The state offers or requires higher pay for effective teachers working in hard-to-staff schools. ✗
• The state offers or requires higher pay for effective teachers teaching hard-to-staff subjects. ✗
• Master’s Degrees The state does not require districts to pay teachers more for master’s degrees. ✓

Recommendations for New Jersey:

• Guarantee at least a 7.5% salary supplement (or roughly $5,000 annually) for teachers working in hard-to-staff schools and/or subjects.
• Require or financially incentivize compensation structures that reward effective teachers based on transparent and rigorous evaluation criteria—not just credentials.
• Redirect dollars from automatic salary increases for advanced degrees or credentials toward more meaningful incentives, such as differentiated pay for teaching in hard-to-staff schools or subjects.
• If changing the teacher compensation system, consider grandfathering teachers under the existing system to ensure their pay does not decrease.