Three things Ohio should learn from Texas on teacher merit pay

Since 2019, education officials in Texas have been implementing the Teacher Incentive Allotment (TIA), a statewide initiative that offers districts and schools the opportunity to create and use a local designation system to identify top educators. When participating districts employ those teachers, they receive additional state funding via an annual allotment based on a teacher’s performance level. Identified teachers can then receive sizable pay bumps. (For a more in-depth look at how TIA works, see here.)

A statewide analysis conducted by Texas Tech University found that implementing TIA “moderately and meaningfully” impacted math and reading achievement. TIA also mitigated teacher turnover, with “particularly pronounced” effects for teachers with three to five years of experience. These findings align TIA’s initial impact with prior research demonstrating that merit pay programs are associated with a statistically significant increase in student test scores and the potential to decrease teacher turnover and increase recruitment. That’s a solid evidence base. But it’s important to note that success largely depends on program design and context. In other words, merit pay can be beneficial for students, teachers, and schools—but only if it’s done right.

Texas appears to be doing it right. And when other states figure out how to thread the needle on complicated policy issues, Ohio leaders should pay attention. Here are three lessons that policymakers should learn from TIA as they consider bringing merit pay to the Buckeye State.

1. Make it optional.

Participation in TIA is voluntary. In fact, the word “optional” is right there in state statute. By not requiring districts and open-enrollment charter schools to participate, Texas leaders ensure authentic buy-in. Schools sign up because they want to participate not because they’re being forced to, and that kind of willing engagement increases the likelihood of rigorous implementation.

It’s also likely that TIA’s voluntary nature has been instrumental to its growing popularity. According to the 2024–25 annual report, TIA participation jumped from 35 districts in 2019 to more than 800 by 2025, which is roughly two-thirds of all Texas school systems. Read that again: Two-thirds of districts in Texas are choosing to participate in a teacher merit pay program. TIA also enjoys growing support among individual teachers, too. In 2025, 63 percent of teachers supported linking pay to classroom effectiveness, up from 56 percent in 2022. The steady climb in participation numbers and popularity indicates that TIA has a lot of staying power. That level of durability—especially when it benefits students—is hard to find in education. And while it’s possible that a mandate could have achieved the same, the fate of other top-down initiatives suggests it’s unlikely.

The upshot? TIA is the merit pay version of “if you build it, they will come.” The quality of the initiative matters immensely. If TIA was poorly designed or poorly implemented, it’s unlikely that so many districts would continue to participate or that a majority of teachers would be on board. But TIA is well-designed and well-implemented, and inviting districts to participate instead of requiring them to do so is a key part of why this initiative has been successful. In Ohio, where top-down teacher policy mandates have routinely endured pushback until they’re eliminated, the best path forward is an optional program.

2. Strike a balance between flexibility and oversight.

TIA permits districts to design their own designation systems to identify high-performing teachers. This flexibility is crucial for two reasons. First, it creates a sense of ownership. When teachers play a role in designing the system that evaluates them, districts are more likely to implement it faithfully. Second, it empowers local leaders to design systems that support their specific staffing needs and meet localized goals for retention and recruitment. Unique design, rather than a one-size-fits-all system, is a win-win.

Designing a local designation system isn’t a free-for-all, though. Texas has constructed strong guardrails around the process. Table 1 identifies the three main components that each system is required to address, as well as some of the flexibilities that are available to districts.

Table 1. Three main components of a TIA local designation system
 

The key to how Texas balances flexibility and oversight is TIA’s three-year application and approval process, which requires districts to obtain two separate forms of approval before they can receive TIA funding. Unlike some initiatives, where approval processes are mostly for show, TIA’s historical acceptance rates indicate that Texas isn’t just rubber-stamping whatever districts submit. These are legit expectations.

The first step is system approval. As outlined in Table 1, districts are permitted to design their own systems, including identifying which teachers are eligible to participate and determining how they can earn a designation. Districts develop their systems over the course of a year—the application year—while engaging in technical assistance sessions that are offered for each component. They are required to submit their system to the state for approval by April. The Texas Education Agency (TEA) then scores applications to determine whether the locally designed system meets state standards. Districts must meet “Full Readiness” in all the statutory categories for their system to be accepted. Those that fail to do so have an opportunity to go back to the drawing board. But districts with accepted systems move on to initial implementation and the second step of the approval process.

The second step is data validation. During year three of the process, districts are required to submit their teacher designations and performance data to a third party—Texas Tech University—to evaluate its validity and reliability. Texas Tech conducts ten different data checks, including correlations between teacher observation scores and student performance ratings (if a teacher earns high marks on the observation component, they should have equally high marks on the student growth measure), confirming alignment between district designations and statewide value-added data, and a comparison of district designation percentages to statewide performance standards. If districts earn approval, TEA processes their designations. Districts that fail to earn approval can make improvements to their system using feedback from the data validation process and try again in subsequent years.

3. Don’t skimp on funding.

Since its inception, TIA has funded more than $1 billion in allotments. That’s a significant amount of money. But it’s also the cumulative total over six school years. And while Texas’s 2025 allotment total—$481 million—is the largest to date, it’s not even 5 percent of Ohio’s foundation funding for public schools in FY25.

It’s also important to remember that Texas is much bigger than Ohio. The Lone Star State has more than 5.5 million students to Ohio’s 1.6 million public school students and nearly 375,000 teachers to Ohio’s roughly 100,000. Even if we copied and pasted every single aspect of TIA into Ohio, it would cost much less to implement here. For example, Texas had 42,294 designated teachers in 2025—roughly 11 percent of the total teacher population—and distributed $481 million in allotments. TIA amounts vary widely, but that works out to $11,373 per teacher. In Ohio, 11 percent of the total teacher population would be just over 11,000 teachers. At $11,373 dollars per teacher, that’s roughly $125 million total—a much smaller price tag with the same amount of bang for the buck in terms of outcomes.

All that said, doing merit pay the right way isn’t going to be cheap. If lawmakers aren’t willing to invest a consistently significant amount of money into this policy over time, they’d be better off steering clear. But if they are willing to invest, there are four crucial funding details they have to get right.

First, it should not be a grant program. TIA is an allotment included within Texas’s school funding system, making it a steady and sustainable funding source for schools. Grant programs, on the other hand, are temporary infusions of cash that have to be re-upped every few years and are subject to political whims and budget constraints. If Ohio wants to implement a TIA-style program that achieves similar success, then that program needs to be a part of the state’s school funding formula.

Second, lawmakers need to go big or go home. Measly bonuses of $500 to $1,000 aren’t going to cut it. If Ohio leaders want to incentivize greatness, then they need to put their money where their mouth is and offer our best teachers meaningful amounts of money that match their meaningful impact on students. TIA’s allotment formula is complex, but generally ranges from $3,000 to $32,000 depending on a teacher’s designation level and where they teach. Ohio doesn’t have to use those exact numbers, but it should follow Texas’s lead and make a sizable investment.

Third, Ohio policymakers need to commit upfront to fully fund the program. That will be a departure from the norm, as there are currently several incentive programs that are structured to award smaller funding amounts than promised based on how many applicants qualify. Funding incentive programs this way makes political sense, as it allows lawmakers to allocate a specific amount of money upfront. But it’s also irrational because it diminishes the power of the incentive. If a teacher in Cleveland works her butt off to earn a $15,000 bonus but only ends up receiving $5,000 due to funding availability, it’s highly unlikely that she—and every other teacher, once the word spreads—is going to positively respond to future incentives. Delivering smaller rewards than promised is also a surefire way to torpedo efforts to retain top talent, teachers who have plenty of other higher-paying options available outside the classroom. In Texas, there’s no cap on TIA allotment funds or the number of teachers who can earn a designation. Ohio should follow suit. Yes, it’s going to be expensive. But cutting funding corners will undercut the incentive and eventually render the program ineffective. 

Fourth, Ohio should provide additional dollars to schools that serve high-need students. Texas does so by including multipliers for rural schools and socioeconomic status in its allotment calculation. Ohio could also prioritize rural schools (data show they often struggle to fill teacher vacancies) and low-income communities. But it doesn’t have to stop there. It could allocate additional funding to other students and communities, as well, like urban schools, special education students, or English learners. And thanks to the recently passed state budget, Ohio will soon have data on teacher vacancies. State leaders could use those data to direct funding toward the subjects, grades, and schools where teacher shortages are the most persistent.

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Teacher merit pay has a long history of controversy and pushback, including in Ohio. Much of that pushback can be attributed to valid questions about fairness and effectiveness. If Ohio leaders want to bring performance pay to the Buckeye State, they’ll have to answer those questions. Designing an initiative that’s modeled after TIA—an optional program that balances flexibility and oversight and doesn’t cut funding corners, all while benefitting students and teachers—would go a long way toward doing so.