I agree that merit increases should not be automatic. On the other hand, I'm guessing that what you're calling "merit" are actually "cost-of-living" increases. State employees deserve to be able to afford to subsist! Not all state agencies pay their employees as well as others. ADF&G has highly educated employees who are paid quite poorly while DOT has poorly educated employees who are paid more than they're worth. How much does a flagger make to stand around holding a sign? That flagger can get overtime pay whereas an ADF&G biologist with a Master's degree or even a PhD is salaried and expected to work overtime for no extra money. I think Khan Academy can do well for teaching basic math up to calculus even. But, when you want that student to be able to think for themselves to innovate new technology or cures for diseases - they need to be able to think! That's where excellent teachers come in. We need to stretch the learning of American children and that doesn't come in a box.