More than 300 school districts and charter schools across the state — mostly small, rural ones — lack the funding to pay for the teacher evaluations that are used to determine merit pay and required under a 2011 teacher evaluation law.

Now an education working group at the Capitol is recommending that lawmakers combine that law with a voluntary merit pay system used by a quarter of all Minnesota school districts to help fund evaluations that determine merit pay.

The merit pay system, called Q-Comp, was a voluntary program passed by former Gov. Tim Pawlenty as an alternative to compensating teachers based on seniority and college progress. About a quarter of schools, which serve about half of all students in Minnesota, have applied for funding under the state law. To qualify for the program, districts or charter schools had to develop tools to measure student performance and progress, benchmarks for improvement and a rigorous, research-based system of professional development.

Merging the 2011 evaluation law with Q-Comp would create a single fund to pay for a system of teacher evaluations. Districts would receive $169 per student from the state, under the working group's recommendations. Districts would also be able to enact a levy of up to $91 per student.

School districts and teachers have criticized funding shortfalls they say have made it difficult to carry out the requirements of the teacher evaluation law. Q-Comp has a funding cap of $75 million annually, which has left 344 school districts and charter schools without access to the money they need to develop and perform evaluations.

A group of education stakeholders told lawmakers Thursday that the two laws' aims are similar and should be combined to equalize funding for all school districts.

"I hope that as we bring this forward that committee members will seriously consider these recommendations," said Rep. Yvonne Selcer, DFL-Minnetonka, a member of the working group and the House Education Finance Committee. "I do believe it'll be good for student outcomes."

A University of Minnesota study provided evidence that Q-Comp — short for quality compensation — has improved students' reading scores. It found measurable gains in reading scores for students in third through eighth grade in participating Q-Comp schools. Those gains "appear to be driven especially by productivity increases among less-experienced teachers" as a result of the quality-compensation program, the study found.

In a statement, Denise Specht, president of Education Minnesota, the statewide teachers union said the "plan could eliminate the funding disparities among districts and will create the right environment for teachers to continually improve their practice for years to come … This is the best way to make education policy for a state with districts in large cities, suburbs and rural communities."

Selcer, the Minnetonka lawmaker, said the current situation is unfair because many districts are struggling to come up with the money to evaluate teachers.

The Plainview-Elgin-Millville school district, which serves about 1,500 students northeast of Rochester, is among those that have looked elsewhere for funding, said Joe Cerar, a high school social studies teacher in the district.

On behalf of his school district, Cerar applied for and received a three-year grant of $90,000 from the National Education Association, a national labor group representing teachers.

He said it's been frustrating to worry about finding sustainable funding to carry out the teacher evaluation law.

Once the grant money runs out, Cerar said it's unclear what will happen if the state doesn't provide permanent funding.

"We're concerned with what's going to happen when that budget runs out," he said. "We really hope that the Legislature is going to find an ongoing source of funding to do this."

Katy Perry, an education issues specialist with Education Minnesota, the statewide teachers union, testified in support of the recommendations.

"Adequate funding of the recommendations is critical to success of teacher development and evaluation," Perry told lawmakers. "It is absolutely essential that the recommendations of the work group be taken as a whole and adequate and equitable funding be provided."