Four Principles and a Challenge

The following remarks were delivered by Mackinac Center President Lawrence Reed at the Michigan Association of Public School Academies's fourth annual conference, "Education's New Leadership," held in Ypsilanti Nov. 7-8, 2001, as part of a debate with State Superintendent of Public Instruction Tom Watkins.

Thank you, ladies and gentlemen of the charter school community, for this opportunity to speak to you. I regard it as a great honor because of who you are and what you are doing. The Mackinac Center for Public Policy first called for charter schools more than a decade ago, when only Minnesota had them, and here we are today with

186 charter schools in Michigan;
66,451 students in Michigan charter schools, 4 percent of all public school children in the state;
75 percent of Michigan charter schools experiencing enrollment increases this year; and
67 percent of those schools facing waiting lists of parents eager to send their children there.

All of that is a tremendous tribute to the incalculable service you are rendering every day. You are entrepreneurs on the cutting edge of so many wonderful things that are happening in education in Michigan. You are risk-takers who have poured out your hearts, your time, and in many cases your personal fortunes on behalf of kids. You are the dreamers who are also busy making those dreams reality. You are heroes in my book. And perhaps most importantly, you have no captives. You have only customers. My hat is off to you. On behalf of the children and parents you serve daily and the larger community of Michiganians who desperately seek quality education for all children—thank you many times over for the good work you are doing!

I am a former teacher myself, and I like to give talks that are easy to take notes on. That means an organized outline of bullet points, and here they are, arranged under the broad title of "Four Principles and a Challenge."

I. The "system" is not more important than the children.

Nearly ten years ago, a member of the Meridian district school board in my county of Midland made a shocking remark that epitomized what's wrong with thinking like a monopoly. The context was this: The parents of a gifted child in this district's schools had become quite frustrated and concerned about the district's lack of challenging programs that fit their child's needs so they took the step of enrolling him at nearby Handley Elementary School—another public school in Saginaw County which had a highly-respected gifted program. The parents then went to the Meridian school board and requested that it release the state funding for their child so it could go to Handley; otherwise, Handley would have to charge tuition, which this low-income family would not be able to afford. The board refused.

The parents then pointed out that it was September and school had already started. They had enrolled their son at Handley and would find a way to keep him there. He would not be in class at Meridian when the student count was conducted for the purpose of state aid. For that reason, the parents pointed out, Meridian would not be receiving any state aid for their son anyway. All the board had to do was approve the release of those funds and their son's reassignment to Handley and the money would go to the other school. The board still refused and one board member declared, "You live here, you go to school here!"

That shameful, intimidating performance by that school board member was stupid and Neanderthal. The message was clear: "The system is more important than the children it is supposed to serve." Thankfully in the years since, Michigan law and public thinking have begun to change so that this monopoly mentality is much less respected and tolerated. But we still have a long way to go.

For too long, public education has been plagued by a "Send the cash, keep the change" mentality. In other words, keep shipping the cash (even if we don't get the kids), and don't press us for meaningful reforms.

We must reclaim the original intent of "public education" by focusing on educating the public. Schools need to be learning centers, first and foremost, not employment centers.

My friend with whom I share this platform today—Tom Watkins, Michigan's new superintendent of public instruction—has made a point of saying many times that he wants to "put the public back in public education." Tom, depending on what you mean, that's probably just fine. But let me say that most parents would be very happy if all you did was "put the education back in public education."

How does this monopoly mentality manifest itself? Certainly, the remark of the Meridian school board member is one example. But it shows up in other ways too:

It shows up in a constant, almost mindless drumbeat for more money. Since Proposal A was passed in 1994, the minimum foundation allowance has risen at 2-1/2 times the inflation rate and is up 42.9 percent. In 1993-94, in terms of per pupil spending, the lowest 10 districts spent $3,476 per pupil and the highest 10 spent $9,726. Today, the lowest 10 spend almost twice as much—$6,500—and the highest 10 spend $11,189. Yet we still hear the endless mantra, "More money, more money, more money!"

The monopoly mentality also shows up in many places in the failure to make the tough decisions that can save money for use in the classroom through competitive contracting of school support functions like busing, food service, custodial work, etc.

We all know who the primary obstacle to better management of school dollars is. It's the state's largest union of cooks, janitors, bus drivers and teachers, the Michigan Education Association. The MEA leadership, which is sometimes demonstrably out-of-step with its own rank-and-file, opposes competitive contracting. Their stance is self-serving (dues and power take priority over children), and also laughably hypocritical because the MEA has contracted with private companies for many support services at its own sprawling East Lansing headquarters—and sometimes even with nonunion firms!

School districts need to focus on the primary mission of public education, which is educating kids, not lining the pockets of overpaid union hierarchies. Teachers were shocked to learn recently of the huge salaries earned by more than a hundred MEA officials—salaries that are two, three, and four times what the average teacher makes in a state that already boasts the highest teacher salaries (adjusted for the cost of living) of any state in the union. More to the point, far too many districts spend way too much to clean the floor, feed or bus the kids, or provide health care benefits to the employees. Better management of those public dollars can put more of them to work for the kids in the classroom.

II. Parents are an indispensable key to significant education reform.

Researchers have conducted endless studies to find out what factors correlate most strongly with improved student performance—more spending, higher teacher salaries, smaller class size, bigger central bureaucracies, etc., etc. Some of those factors actually show no correlation or even a negative one. The one factor that beats everything on the positive side, hands down, is parental involvement.

So what does this mean? Three things:

Parents must step up to the plate, read to their children, raise expectations of them, see that they do their homework, inculcate a lust for learning, show an interest in what happens at school.
Schools have to do more to genuinely welcome parental involvement. Too many behave like fiefdoms that don't want the subjects to do anything but supply the money and the kids. They could learn a lot about parental involvement from you folks in the charter school movement.
There's only so much the current system can do to generate more parental involvement. Getting more of this very beneficial factor must come largely from rekindling it from the ground up, making it a truly "civil society" crusade in which people pursue it without expecting the government to do it for them. We must also alter the system so as to make more involvement by parents a truly meaningful thing. That leads me to my third principle.

III. Choice and competition are necessary pre-conditions to school improvement.

All education reforms fall into one of three kinds: rules, resources, or incentives. Rules-based reforms include such things as extending school days and the school year, changing teacher certification and school accreditation requirements, imposing national and state testing, enacting stricter dress codes, and the like. Research has shown that these reforms, while sometimes causing marginal improvements, have failed to turn around a large-scale decline in education. More drastic city or state "takeovers" of failing schools and districts and legislative proposals such as "Outcome-Based Education," "Goals 2000," and other regulatory regimes have been and still are being tried, with the same disappointing results.

Another attempted strategy to improve public education is through resource-based reforms. They include such measures as increased funding, new textbooks, wiring schools for Internet access, renovating or updating school facilities, reducing class sizes (fewer pupils per teacher), and other measures that require greater financial expenditures.

Scholars have studied the relationship between per-student spending and achievement test scores since the publication of Equality of Educational Opportunity (better known as "The Coleman Report") in 1966. Author James Coleman, a leading sociologist, concluded that factors such as per-pupil spending and class size do not have a significant impact on student achievement scores.

Economist Erik Hanushek and others have replicated Coleman's study and even extended it to international studies of student achievement. The finding of over 30 years of their research is clear: More money does not equal better education. There are schools, states, and countries that spend a great deal of money per pupil with poor results, while others spend much less and get much better results.

Yet, despite this and subsequent findings, many lawmakers and educators continue to believe that additional resources and funding will somehow solve the problems within the government education system.

The Kansas City (Missouri) School District provides the perfect illustration of the inefficacy of increasing resources to improve academic and social outcomes. In 1985, a federal judge directed the district to devise a "money-is-no-object" educational plan to improve the education of black students and encourage desegregation. Local and state taxpayers were ordered to fund this experiment.

The result: Kansas City ended up spending annually more money per pupil, on a cost-of-living adjusted basis, than any of the 280 largest school districts in the United States. The money bought 15 new schools, an Olympic-sized swimming pool with an underwater viewing room, television and animation studios, a 25-acre wildlife sanctuary, a zoo, a robotics lab, field trips to Mexico and Senegal, and higher teacher salaries. The student-to-teacher ratio was the lowest of any major school district in the nation at 13-to-1. By the time the experiment ended in 1997, costs had mounted to nearly $2 billion.

Yet, test scores did not rise. And there was even less student integration than before the spending spree, not more. In May 2000, the Missouri Board of Education officially removed accreditation status from the district for failing to meet any of 11 performance standards. The loss of accreditation means the district has two years to raise test scores, improve graduation rates, and make progress in other areas or face the prospect of a takeover by the state.

We have all but exhausted the "rules" and "resources" approaches to education reform, with little to show for our time and money. The one promising category left is "incentives." Merit pay for teachers is one incentive-style reform. But for reasons I've already pointed out here as well as many more, parental choice is the centerpiece of this strategy. The dramatic growth of charter schools and both intra-district and cross-district public schools-of-choice programs all represent recent introductions of incentive-based reforms. These measures are beginning to replace the rigid assignment system with some important but rather limited choice opportunities.

The empowerment and transformation of parents into active agents is the foundation of educational choice theory. It's a fact of life that as human beings, we take a greater interest in those things over which we have some power of discretion than in those things we feel relatively helpless to affect. That's why many people spend more time shopping for the car they want—visiting dealership showrooms and comparing prices and features—than they spend in picking the right schools for their children. For a hundred years or more, governments have assigned our children to local public schools based where our homes are; and we pay for those schools whether or not we're able to choose an alternative. That's a strong financial incentive to stay put. The very nature of public, monopolistic bureaucracies is such that raising objections to what the government offers is frustrating, time-consuming and often futile. But when parents are able to say "no, thanks" with speed and ease, they can and will step up to the plate and behave like real consumers of education who are empowered to start shopping around.

Actually, some parents shop around now. The very wealthy have always had school choice. For them, the price of admission to a good public school may be merely the cost of a moving van and a nice, big house. Or because they can afford to, they will simply pay twice—once in private school tuition and then in taxes for the public system they can reject. A surprising number of poor, inner city families opt for nonpublic alternatives too, but only at enormous sacrifice. Sadly for millions of low income Americans, education for their children means being stuck with failing and dangerous public schools that spend too much to achieve too little.

A strong correlation has long been noted between parental involvement and the success of children in school. The concept of choice takes full advantage of parents' valuable knowledge about their children and their respective talents, abilities, and learning styles. This information equips parents to make optimal choices about where their children should attend school and what kind of school might best suit their children's needs and temperaments.

Some people say that in an educational system that allows for parental choice, the more thoughtful and involved parents may opt out of a particular school, leaving behind to languish in despair the children of less caring parents. But this ignores the synergy that happens when choice and competition are at work. I like to put it this way: It takes only a few patrons to leave the restaurant for the chef to get the message to improve the menu. In other words, choice benefits everybody including those who choose not to fully employ it themselves. That's the magic that has made American free markets the envy of the world.

Why is it that we trust parents in so many areas except education? In our relatively free society, parents decide what foods their children will eat and what foods they will avoid. They decide with whom their children will play, how much television they will watch, and how much homework they will do. The same parents decide which physicians will treat their children's injuries, which dentists will check their teeth, and which babysitters will care for them in their absence. As their children grow, these parents will help them decide which clubs, churches, and organizations to join and which courses of study to pursue. These parents exercise choice when it comes to preschool and higher education, and no one argues that using a government assignment system would make our preschools or colleges better. And yet, many employed by the government school establishment tell us that these very same parents cannot be trusted with choice for grades 1 through 12. That's nothing more than self-serving nonsense.

Recent research indicates strongly that incentive-based reforms are generating greater success than the old rules or resources approach. For example, Harvard economist Caroline Minter Hoxby has found that areas with greater public school choice have higher student test scores and higher graduation rates, but lower per-student spending.

A Mackinac Center study of the impact of charter schools and public schools of choice programs in Wayne County, Michigan, documented that the rise of competition from these sources has worked powerfully to improve traditional public schools. The Dearborn Public Schools are a wonderful example of an administration that welcomes competition and has reacted to it in ways that have made its schools better.

IV. There is merit in multiple modes of education.

One size does not fit all in education. A genuine, flourishing marketplace of competitive educational options should be our goal. Getting there requires that we break down the turf and communication barriers between these competing modes (traditional public schools, charter schools, private schools, parochial schools, and yes, home schools too!). We must recognize the successes of each and learn from them. We must be champions of what works, whenever it works, regardless of which of these modes of education those successes can be attributed to.

This is a good place to say a word about the "accountability" of charter schools, which I know has been made into a major issue by charter school opponents. They like to say that charter schools are not accountable and the way to make them so is to pile on some new rules and regulations so that they end up looking more like the traditional public schools from which their customers have fled.

If I hear that "charter schools aren't accountable" line one more time, I think I'll scream.

Does anyone ever visit a grocery store and react with disdain because the people who stock the shelves and keep the place running are not publicly elected? Do you feel disenfranchised because you don't have an opportunity to line up at some public hearing to discuss the policies that govern the grocery store? Does anyone here think that grocery stores would be more accountable and better managed if we subjected what they do to a public vote and the approval of a distant, centralized bureaucracy? Give me a break.

You folks in the charter school community can write the book on accountability because you've got it in spades. You have no captives. You have only customers. And at a moment's notice, your customers can take a walk and take the money with them. Accountability? You bet. It doesn't get much better than that.

In any event, my point with this fourth and final principle is to stress that traditional government schools are not the only game in town. Wonderful things are happening every day of the week in charter schools, private school, parochial schools, and in the large and fast-growing number of home schools across Michigan. At the Mackinac Center for Public Policy, we spotlight those wonderful things in our popular quarterly, Michigan Education Report.

A Challenge to Our Superintendent of Public Instruction

All this leads me now to take this opportunity, with our superintendent of public instruction Tom Watkins present here with me, to issue a challenge to him.

Tom, I want you to be the best and most successful education superintendent in the nation. If you'll step up and implement the agenda I'm presenting here, you'll become just that. Here are some ideas that I challenge you to embrace and champion:

Be a cheerleader for what works, for all modes and options. When a home schooled student wins the national spelling bee, be a cheerleader for that student and for the numerous, remarkable successes of home schooling. When a charter school takes a student on whom a traditional public school has given up, and makes him a scholar, get up on a podium and praise that student and that charter school to the skies. Don't be a superintendent of only traditional government schools. Step outside the box and be a cheerleader for all schools that work.
Publicly stress that a lack of money is not the root of problems in public education today. Stress that keeping Michigan's economy healthy is in the direct and immediate financial interest of every school. You've been arguing around the state lately that Michigan should "hit the pause button" on already passed and scheduled reductions in the personal income tax and Single Business Tax. I'm saying that you need to hit the "stop" button on all that talk and focus on other things. Michigan's tax burden is ninth highest among the 50 states, according to the Tax Foundation, and we need to keep making progress on that front.
Make an issue of helping schools manage their costs better. Don't accept the status quo as if every school is already getting the biggest bang for their bucks. Most are not. Challenge schools to get the most for the public's money by utilizing the power of competitive contracting for ancillary services. Praise those districts that are doing it to good advantage.
Don't be afraid of choice and competition and don't shrink from being a champion for those values. Help schools appreciate the importance of earning the approbation of willing customers instead of merely the grudging resignation of hapless captives. Jettison any and all vestiges of the monopoly mentality I spoke of earlier.
Work for repeal of Michigan's Prevailing Wage Act of 1965, at least with regard to school construction. Tom, you've used multiple occasions recently to call for more state and federal money for rebuilding school infrastructure. There's a minimum of $150 million dollars available every year in Michigan for school construction if all we do is exempt schools from the Prevailing Wage requirement that they have to subsidize the unions when they build or repair schools. That's what schools will save if we rid them of the burden of this special interest legislation. Back in 1997, Ohio had the good sense to exempt schools from that state's equivalent of our Prevailing Wage law. As reported by the Buckeye Institute in Columbus, Ohio public schools have been saving tens of millions of dollars every year since. The unions will squawk if you call for this, Tom, but do it anyway. You don't work for them. You work for the kids and the parents and taxpayers who pay the bills.
Finally, Tom, you need to support the liberation of teachers. Defend the principle of a free market in labor representation. That means getting up on your soapbox and declaring for all to hear that no teacher in Michigan should be compelled to join or pay dues to a labor organization as a condition of employment. If you won't take that position, Tom, at least endorse the enforcement of important Supreme Court rulings that make it clear that teachers have a right to know fully and accurately what their unions are spending of their dues for political purposes, and to get a refund if they object. You want to talk about accountability? Here's your chance to make teacher union fat cats accountable to their members from whom they extract $100 million a year in dues. Do it, Tom, because it's the right thing to do.

Thank you, ladies and gentlemen, for the privilege of addressing you and for your kind attention to my remarks.