By Joan Gralla
NEW YORK (Reuters) - New York City teachers rated "highly effective" for two years in a row would get a $20,000-a-year salary increase under a proposal by Mayor Michael Bloomberg.
Bloomberg, in his annual State of the City address on Thursday, focused heavily on education, challenging the United Federation of Teachers union to accept his approach to weeding out teachers deemed less effective.
"The marketplace keeps showing us that we have to be competitive if we're going to attract the best," Bloomberg told invited guests at a high school in the borough of the Bronx.
Bloomberg also said the city would offer to pay off $25,000 of student loans for teachers who finished in the top tier of their college classes.
The starting salary for a New York City teacher is $45,530, the city's Department of Education said.
Bloomberg has asked voters to hold him accountable for improving the nation's biggest school system with 1.1 million students and 75,000 teachers. But the city lost $58 million in federal funding for 33 schools because its way of evaluating teachers was not deemed satisfactory.
Though the powerful teachers' union has blocked stiffer performance evaluations for the vast majority of the school system, Bloomberg said he has the authority to form committees at 33 schools to rate teachers and replace up to 50 percent of them. That evaluation program will be put in place, he said.
Accusing the mayor of being lost in a "fantasy world of education," the United Federation of Teachers said in a statement: "It doesn't do the kids and the schools any good for him to propose the kind of teacher merit pay system that has failed in school districts around the country."
Bloomberg said the cost of his new initiatives will be paid for by making government more efficient, including consolidating some operations.
Layoffs on Wall Street, New York City's economic engine, have taken a bite out of the Big Apple's tax revenue, forcing Bloomberg to close a budget gap.
(Reporting by Joan Gralla; Editing by Jan Paschal and Daniel Trotta)