Purpose: Federal and state policymakers in the USA have sought to better differentiate the performance of K-12 teachers by enacting more rigorous evaluation policies. The purpose of this paper is to investigate whether these policies are working as intended and explore whether district stressors such as funding, enrollment, and governance are associated with outcomes. Design/methodology/approach: The authors examined teacher evaluation ratings from 687 districts in Michigan to identify the relationship between district stressors and two outcomes of interest to policymakers: frequency of high ratings and variation of ratings within districts. A qualitative index of variation was used to measure variation of the categorical rating variable. Finding: About 97 percent of teachers in Michigan are rated effective or highly effective, and variation measures indicate overwhelming use of only two ratings. Charter school districts have fewer teachers rated highly than traditional districts, and districts with higher fund balances have more teachers rated highly. Districts with increasing fund balances have higher variation. Practical implications: The findings suggest that district stressors presumably unrelated to teacher performance may influence teacher evaluation ratings. State teacher evaluation reforms that give districts considerable discretion in designing their teacher evaluation models may not be sufficient for differentiating the performance of teachers. Originality/value: This research is important as policymakers refine state systems of support for teacher evaluation and provides new evidence that current enactment of teacher evaluation reform may be limiting the value of evaluation ratings for use in personnel decisions.