Salaries are one of the most powerful policy levers states and school districts can use to attract qualified, effective, and diverse teachers. What role do states play in supporting strategic use of salaries? This report examines the state teacher compensation policies that influence districts' potential strategic use of teacher pay. It analyzes three types of state policies that aim to attain three purposes: (1) Differentiated pay: To attract teachers to traditionally hard-to-staff subjects or schools; (2) Performance pay: To reward high-performing teachers; and (3) Pay for prior work: To compensate teacher candidates for prior experience relevant to teaching. With the influx of federal Elementary and Secondary School Emergency Relief (ESSER) funds, some states have designed new or expanded already existing initiatives aimed to attract or retain teachers to hard-to-staff positions. The analysis in this report includes these state strategies, while acknowledging that they might only remain in place temporarily while ESSER funds remain available. [For the the second report in this three-part series, "State of the States 2021: Teacher Preparation Policy," see ED611532.]