The pay for performance plan is part of Idaho Superintendent of Schools Tom Luna’s Students Come First laws, which were implemented last year to reward excellence in teaching in Idaho's schools.

     The Senate Bill 1110’s statement of purpose for the pay for performance plan says, "The plan rewards teachers and administrators on a school wide basis for student achievement as determined by academic growth. Local districts will also reward schools based on growth as determined at a local level."

     This means that school districts will have an additional salary pay for their teachers who received a share for the previous fiscal year. The state distributes these shares to districts to disperse to their teachers and faculty. A share is basically a portion of the state allowed money.

    The state portion of the plan will be based on school-wide performance on the ISAT. Staff in a school will be given additional pay if the school-wide growth in student achievement on the ISAT over the year ranks in the top three quartiles of schools statewide.

     The majority of money will be given to schools with the highest academic growth. About 30% of the money goes towards schools demonstrating overall achievement, and the other 70% will go towards schools demonstrating growth.

    According to the bill, the pay for performance plan consists of four parts: a state portion, a local portion, a hard to fill position portion, and a leadership portion. In other words, the pay for performance plan is divided up so that the state portion will measure the growth in school-wide performance on the ISATs and the local portion for Lakeland School District will consist of scoring of the Lakeland Assessment of Writing (LAW). The state portion and local portion will go into effect during the 2012-2013 school year; the hard to fill portion and the leadership portion will go into effect during the 2013-2014 school year.

     The state gave districts the flexibility to decide what areas to focus on for measuring the growth of their schools. For example, if Lakeland School District decided to, they could choose to measure the growth of Timberlake High School to determine if the growth is meeting state standards. However, the Lakeland School District chose to measure the LAW.

     The pay for performance plan does not come cheaply. For the fiscal year of 2013, the cost will be $38 million and for the fiscal years of 2014-2017 the cost will be $51.3 million each year, according to the bill.

     The Joint Financial Advisory Committee (JFAC) is a part of the state government that makes the suggestions that determine the budget for each portion of the state government. JFAC is the committee that writes the bills with the suggested cost of the education part of the state's budget, and then they send it to the legislature for approval.

     According to Idaho law, the state cannot spend more than it brings in as revenue. This means that if the state’s revenue is equal year to year, and one of the other budgets goes up, such as the pay for performance plan, the money has to come from some other department, like the Department of Education, the Department of Health and Human Services, or Department of Law Enforcement. This then limits the chance of all the bills being passed for worries of running out of money.

     Before the Students Come First legislation was implemented, teachers could achieve tenure after three years of teaching. Prior to the changes, tenure worked so that the school could fire a teacher with just cause by following due process.  In case of budget shortfalls, the teacher who was the most recently hired would be the first to go. The legislation enables schools to selectively lay off teachers based on merit in case of a budget shortfall. With the Students Come First legislation, tenure is no longer offered, but a teacher with a continuing contract would have been grandfathered in, preventing him or her from losing tenure status.

     According to Luna, pay for performance is a way to reward good teachers and remove poor teachers from the education system. The idea is based on allowing schools to pay teachers who help students beyond test-taking skills and to remove teachers who don't spend quality time with their students.