Monday, March 17, 2008

What I Mean by a Charter School

I've mentioned a few times lately that I support the notion of public schools funded via a voucher system - as envisioned by the late Nobel award winning economist, Milton Friedman. Unfortunately, we also use the term 'vouchers' in the context of the half-baked charter school system we have here in Ohio. These two concepts are not the same. In a dialog with Dave over at Into My Own, I wrote the following comment that I think might clarify what a Friedman voucher system looks like:

I have been a proponent of a voucher program ever since reading Milton Friedman's writings on the subject. In this case, I am talking about a universal voucher program, where every kid gets a voucher representing 100% tuition, and the voucher can be spent only at an accredited school.

The voucher system in Ohio is a bastardization of the concept -- badly conceived and poorly implemented. The funding is screwed up, giving the charter school only a fraction of the per-pupil money a public school gets. And the licensing is deficient - there are many examples of people running charter schools who have no business being in the business - because they think it's a business and not a vocation.

The basis for my belief in vouchers is simple: if each individual family can make their own rational decisions where to send their kids to school, then only schools that deliver what is needed will get kids and their money. Effective schools will thrive and ineffective schools will die.

This is the core concept of a free market system.

There needs to be standards of course. A school must be licensed by the government to accept vouchers as payment (and to be allowed to submit vouchers to the government in return for cash). To be licensed, the school must show that it has faculty accedited and licensed to teach, it must offer a curriculum that meets standards set by the State, and it must demonstrate that it is effective in educating kids in the basics.

A charter school could not be a for-profit entity, as is currently allowed in Ohio; it must operate as a not-for-profit. Many people are confused about the difference. The important difference is that a not-for-profit does not have investors or owners, so no one gets to pocket any profits. All the money that comes into the not-for-profit organization must be used for the stated purpose of the organization - in this case, to educate our kids.

I do not propose any change in the way teachers are licensed or schools are evaluated in terms of performance. However, there would be some teeth behind the evaluation: a school which fails to perform at "Continuous Improvement" or better, for example, would lose its license to accept vouchers.

Any kid may take his/her voucher and use it to pay for 100% of their education in any school licensed to accept vouchers. A regional transportation network would be developed to allow a kid to attend any school within a reasonable distance (e.g. 25 miles) at no cost.

I think the outcome of such a system would be a mixture of boutique schools - that have perhaps only a few hundred students - all the way to regional organizations which operate many buildings and serve many grade levels. We have one of these boutique schools here in Columbus. It's called Metro High School. It specializes in math and sciences, and accepts only 100 kids for each of its four grade levels (9-12). Right now, each central Ohio school system is given a quota, based on the current size of the system (i.e. Columbus City Schools with 56,000 students gets the most slots). It has no competitive sports or performing arts facilities because it chooses to allocate all of its budget to basic education requirements and to advanced study in math and science.

With 400 students and vouchers worth $10,000/student, this school would have a budget of $4 million/yr. Assuming a student/teacher ratio of 20:1 and $75,000 in salary an benefits, payroll would be around $2 million once a few administrators and staff are added. Figure a $10 million building, and the annual financing and operations cost would be about another $1 million. That leaves $1 million/yr for supplies, transportation, equipment and all kinds of good stuff. The same kind of philisophy could be applied to a school specializing in arts, or gymnastics, or foreign language/culture studies (imagine a school in which only Mandarin Chinese is spoken, for example).

Another configuration might be a regional school organization that can serve let's say 50,000 kids. All those vouchers would generate $500 million of income for the organization. Such a system might offer a broader diversity of programs, including some which require considerable capital outlays, such as athletic and performing arts facilities.

Other schools might offer vocation programs for kids who choose that kind of education. Our country cannot be one of only engineers and burger flippers. We need folks who are ready to take on the highly skilled production and service jobs a strong economy requires: Computer and communications technicians, manufacturing technicians, medical assistants, transportation system specialists, etc.

What if some folks want to get together and raise some money to build a nice lacrosse stadium at their school, or maybe a professional quality performing arts center? Or something else that will cost more than can be raised just from voucher income? That's okay. But you still have to let any kid attend, and have their voucher be all the tuition they need. Such endowments are a common thing at colleges - public and private.

There are some important details missing in my plan of course. For example, how do we serve the needs of kids with physical, mental and emotional disabilities? I think part of the answer would be to give such kids a voucher worth more money than the standard voucher. That might encourage a group of educators to form a school just for such kids. I've seen such schools. A good friend of mine who teaches in Germany has a daughter who attends one, and despite her severe disabilities - she is given the opportunity to experience life to her full capacity.

But note, I'm not suggesting some kind of retreat to the 'institutions' of the past - but rather an alternative for the parents - and the kids. Any time a parent believes their kid is ready to be mainstreamed, they can pull out of the specialized school and enroll their kid in the general population of any school they want, taking the higher value voucher with them to fund special needs the kid might have at the new school.

Other than the tradition of the thing, I don't know why we have let K-12 school systems grow into these bureaucratic and monopolistic entities performing far below their potential. We can have food stamps without dictating where people can buy food with them. We can have Medicare without restricting a person's choice of which licensed doctors or accredited hospitals can provide their care.

When our kids graduate from high school, they are free to apply to the college of their choice. Do we, or our kids, suddenly become more capable consumers of educational services when the kids graduate from high school?

Or is it that we restrict choice to only those who can afford to move to a different district?

Every kid deserves an education, and I'm willing to pay taxes to ensure that every kid gets the opportunity, just as I help pay for food stamps and Medicaid.

But let's get rid of the K-12 education monopolies.

Okay - that's what I'm talking about when I say 'charter schools' or 'a voucher system.' But I think we all realize that it would take a small miracle (or a big disaster) for our public school system to evolve to such a thing.

Our here-and-now option is the school system we have, and that's what we need to focus on. After all, there are 15,000+ kids attending Hilliard City Schools right now.

But I do ask you to consider what Ohio might be like with a system I've proposed (with the help of Dr. Friedman). If it makes sense, let's spend some energy on thinking about how we might transition to it. I think it's possible.


  1. Based on my knowledge of ohio public schools, the voucher system is the most realistic approach to solving the bind that faces all Ohio public schools today (a fixed expense structure with salaries and fringe negotiated by unions). It is quite clear that many of Ohio's school are heading down the same path . . . . revenue dollars that cannot keep up with the 7% avg. annual salary increases (plus fringe) guaranteed to our teachers.

    All one has to do is look to the automotive industry to understand that unions are clearly a concept of the past. Let's just hope that we don't go down a similar path as those who were employed at Ford and GM.

  2. The voucher mechanism does not by itself answer the question about how much value to assign to a voucher. I've used $10,000 as a round number, but with no more thought other than that's about what we spend in Hilliard. It might need to be more, but could probably be less.

    I like a Friedman-style voucher system because it does three things: a) it gives kids who care access to good schools regardless of the neighborhood their parents can afford to live in; b) forces the schools to be immediately responsible to its customers; and, c) drives ineffective educators and administrators out of the system.

    Unions may or may not play a role in a voucher system. As long as every school has the freedom whether or not to unionize, I think unions can provide a valueable role. In particular, the union can be the guardian of quality in the teacher ranks such that a school would prefer to hire union teachers, and know that by doing so the school gets highly qualified individuals who are worth the premium pay. As a parent, if this were the case, I'd want to send my kids to a school staffed by teachers who were members of the union.

    On the other hand, if the primary goal of the union is to protect high wages and mediocre performance, then as a school operator, I'd go for non-union teachers every time. And as a parent, I'd seek out non-union, but high-performing schools, because I'd know that more of the voucher money is going to programming enhancements, and not propped up wages and benefits.

    By the way, I grew up in a manufacturing town with lots of union workers. Those unions were successful in getting their members safe working environments plus high wages and great benefits that increased every year right up to the point when the manufacturers moved out and left those union members unemployed. The companies didn't move overseas - they just moved to the South where they could find folks who would do the same for less.

    Our schools are operated as monopolies when there's no compelling reason to keep them as such. They aren't exactly monopolies of course - and the more money you have as a parent, the less they seem so. But if you lack the resources to move to a different community, you have no choice in schools. The school that has the exclusive rights to serve your neighborhood is where your kids have to go.

    Vouchers give everyone a significant degree of choice.