It’s a pleasure to be here in North Carolina. I was telling Lindalyn Kakadelis on the way over that I love getting out of DC because when I stay in office too long I start to talk in acronyms, and it’s just good to get out and talk with real people and find out about the issues that we’re facing, especially the charter operators in the room.

I’d love to get your insights about what I’m saying today, because again, a lot of times we think we know everything there is to know based on the feedback that we get, primarily from the lobbyists who come to see us, but oftentimes those lobbyists, and it’s not just the National School Board Association, but all the other ones that have powerful lobbyists, and they only give you one angle of this story. So I’m eager to talk to those of you who are on the ground in doing all the great work that you do.

I should also mention that I was very excited to come out here to launch this effort by the Alliance, because about, I would say six or seven years ago, the John Locke Foundation invited me out to North Carolina to do something similar. In this case though, John Hood actually made me travel with him to four different cities with the staff to, again, do a back to school event. So this is a little bit more civilized. I don’t have to get in the car and go to a lot of places.

But I just thought it was very important for a state think tank like the John Locke Foundation to be doing that kind of work, because again, most individuals who work in think tanks are sitting at their computers putting very good studies out. So they’re talking about it on radio shows, they’re getting out thoughts about it. But at the end of the day, it’s not until you’re out there selling it to your customers and consumers of what you’re trying to sell that you begin to realize that you may have to dumb down what you’re saying a little bit in order to really do a good job at marketing it.

So I think this is a great effort, and I think that’s one that I hope other states model their efforts after.

I’m here today to talk about charter schools. I think most of you are pretty familiar with charter schools. But it’s fair to say, I don’t need to start from the basics, right? If anyone is unfamiliar, we can talk afterwards.

But as Lindalyn mentioned, I run an office at the Department of Education called the Office of Innovation and Improvement. It’s almost two years old. This office was created by Secretary Paige because he felt that with all the requirements that No Child Left Behind was putting in place, some individuals at the state and local level may feel that they have to resort back to a back-to-basics curriculum, and that innovation was not something to experiment with in this age of accountability.

He really wanted this office to focus on the innovative things that you could do as a result of No Child Left Behind. And so what I do on a daily basis is administer 28 different grants that Congress has already approved, but on top of that, I also try to go in and see if there are any grants that we’re currently funding that are doing interesting things to help school districts and schools to get out of their shell and experiment with new ideas.

We try to stay away from curricular innovation, so most of the innovations we focus on are management oriented, which is why concepts like charter schools and choice, any kind of management tools people put in place to reform the school system are things that our office has focused on.

Specifically in the area of charter schools, the President’s budget this year has called for $220 million. This is the ’05 budget. $220 million for the charter school grant program, and $100 million for a program called Credit Enhancement for Charter Schools.

Now, Congress is not always that generous with the amount of money that they give us, so in the case of the charter school program, this past year we only got $218 million to give to states for charter schools. North Carolina has already been a grant recipient; they’re in the process of giving you your continuation award. The money goes to the states and then the states decide how to spend it. And I know that depending on which charter school you’re talking, you may not be getting your fair share from the state.

If anything like that is ever happening to you, you should definitely call my office. We have a staff of individuals who can help you with these problems.

There are two different types of problems. One is that the charter grant money which is mainly targeted to start new charter schools, the other problems come with the formula grants that go to states to fund school systems as Title 1, Title 2, Title 3; you name it.

All of these formula grants are supposed to also reach charter schools, especially if you’re serving a high percentage of Title 1 students. So if you’re not getting your fair share, again, you need to give us a call because our job is to make sure that this funding is being disseminated in an equitable fashion.

A little bit about the charter school facilities program.

This is a new program that’s been around for about two years. The goal of it is to really try to help charter schools purchase and lease school facilities. The knowledge in mind that most banks are not interested in investing in new ventures on charter schools because you could be considered a financial risk.

So what we’ve done is create a pot of money at the federal level. There again, Congress only gave us $37 million last year, and $25 million the year before, but the money has gone to nine different non-profit organizations whose mission has been to find ways to enhance the credit of charter schools.

Most of the work that they do is in the area of loan guarantees. And I should also mention to you we actually have an entity that we’re funding right here in North Carolina called Self Help which has funded five charter schools already. At Gaston Prep, for instance, they helped with the gymnasium.

So just a little bit about some of the noise that we are hearing about right now, out there about charter schools, just to be very clear, despite this noise, despite all the criticisms we hear about charter schools in the media by groups like the American Federation of Teachers, this administration is very committed to the concept of charter schools and to the work that you folks are doing in operating these schools.

There are three sort of distinct reasons why we feel this is important.

First and foremost, we believe that charter schools are to this day probably one of the most innovative and potent reforms injected into the education reform system, because they’re the only way in many places to bring the best and the brightest individuals to the table to help create a new school, be they teachers, principals, investors. When you’re dealing with a traditional school system, you’re going to have a hard time bringing the talented college professor who wants to help the school system and get them into the business of teaching.

But charter schools are able to do that and I think that’s a very important contribution. They are also, in my view, one of the only laboratories where you can test new ideas, because they are accountable to their authorizer and because they are schools of choice, there’s also that level of safety incorporated in them which means experiment, but you can’t push the envelope too far, because if you go too far, parents may not like what you’re doing; or more importantly, your authorizer may also revoke your charter if you are trying to something that may not necessarily be good for the kids.

But more importantly, the reason why charter schools are important to us is because they’re kind of, the premise is that they are based on, or similar to the underpinnings of the No Child Left Behind Act. And what are those; accountability, choice and flexibility. That’s what No Child Left Behind is all about.

Accountability to states so that states that are getting federal funds from us, are producing results, which is what charter schools are very familiar with. Flexibility, which is also one of those things that we’ve given to states in school districts, and unfortunately for a variety of reasons, they haven’t even figured out how to use the flexibility in creative ways but charter schools are very familiar with the concept of economy and flexibility, and because of choice, which makes charter schools so successful, again, in No Child Left Behind you are basically saying that if the schools is not making what we call adequate yearly progress for two years in a row, and beyond that you have to offer public school choice to all of the students in that school.

Now, our hope is sort of twofold: we hope that charter schools are not only going to thrive under No Child Left Behind—we’ll talk about that in a little bit, in a minute—but also that you guys will help us sell some of the creative things that you have already done to the traditional public school system.

And I know that can be hard at times, but because you’re already schools of choice and because you’ve already swallowed that accountability pill, I think you have a lot of lessons that you can share with other traditional public schools. I’m not quite sure if those dialogues are taking place, but they’re important dialogues at this point in time, dialogues that I think will not only help the education system as a whole, but at the same time, help get traditional public schools more used to the importance of charter schools and what kind of contributions charter schools can make to the overall wellbeing of students.

Moreover though, I think, and this again, may or may not be happening in North Carolina already, we really hope that you will step up to the plate to accept some of the students who are transferring from low-performing public schools to your school if you’re not on the needs improvement list. We also hope that you will become providers of supplemental services, that you have the capability of doing that.

Again, these are provisions that kick in for the traditional, for the students in the traditional public school system, when a school is not performing up to par we need different entities outside of that school system that are making adequate yearly progress, to really rise up to the demand and try to help the students in the schools.

So if you already have an after school program, to really encourage you to try to become a provider of supplemental services and try to really teach some of the students in your neighborhood maybe, needing this service from traditional public school system. And more importantly, there is a provision in No Child Left Behind which requires that schools that have failed to make adequate yearly progress, to be restructured.

This is the provision that we feel the charter school community could really benefit from. Everyone’s looking at me saying, “Why do we want to take over a school that’s going under reconstruction or restructuring?”

That’s a very good question, but I think those of you who are doing a good job, who are already closing the achievement gap, that you have a vision, it’s important for you to step up to the plate and help these other schools reform that are falling behind. And if you’re interested, just let me know, I’m not going to put too much pressure on folks.

We’ve commissioned a couple of papers by Bryan Hassell, who you are probably familiar with because he’s based here in North Carolina, and the education commission of the states to really get them to think through how they can get the concept of chartering to fit within the No Child Left Behind Act on how charter schools can take advantage of restructuring to help other schools become charter schools.

But until then, I think more than anything, I just need volunteers that will have good ideas and who have good successful charter schools that are willing to replicate.

Now, you are probably all looking me saying, you know, she just came here from Washington with this laundry list of ideas and how is this really going to affect me on a daily basis? And I don’t know this for a fact, but there are about 20 charter schools in North Carolina that are not making adequate yearly progress.

I don’t know if you guys are one of them. If you are one of those schools, you are probably looking at me like, well, how am I going to benefit from anything that you mentioned just now? There are probably also others who aren’t that, who are successful, and I think most of the really successful ones are thinking to themselves, you know, it’s the day to day job of keeping the school successful is a hard job, so why would I want to take this leap and try to accommodate more students or try to restructure another school?

There may be some others in the room who will say, you know, with all these studies coming out from Helen Ladd to the American Federation of Teachers, to just a list of schools needing improvement, well, it makes you think that charter schools and chartering as a concept, is an effective tool at closing the achievement gap.

So what I was going to do is just go after these points one by one, and try to convince you that you are actually the best people to put in charge of solving the problems that we have in our education system.

So those of you who are able to affect the school directly, improvement is first and foremost, and again, I don’t know if you guys are or not, I think you have an advantage compared to the other public schools, certainly outside of North Carolina, that you may not be aware of.

First of all, you are a charter school in North Carolina. North Carolina was ahead of the game on the accountability front, compared to most other states, so you’re already familiar with what accountability means. You already again, swallowed that charter school, but that accountability pill, when you became a charter school.

So the concept of being accountable is familiar to you. And because you’re schools of choice, people are selecting you as it is. So because of all those reasons, I think you are in a much better position than other schools that are labeled as needing improvement, in trying to explain what that label means.

Because oftentimes it simply means that there’s something in your school that may be broken. It doesn’t mean that the school as a whole is failing. It simply means that you maybe have to make a few adjustments to make sure for instance that your limited English proficient students do better academically.

So explaining that and that whole process of PR is something that I think charter schools are better at than the traditional school system, which in most cases acts very defensively when they’re labeled. So if you have strategies like that in your back pocket, please let us know how you’re doing so that we can market that concept and try to get other schools to emulate what you’re doing in your own school districts.

Now, if you’re a school that is succeeding and you feel that just the process of remaining successful is difficult enough, so why would I want to take over another school, why would I want to become, replace a priority for the students coming to me from the schools that needed improvement?

To you I have only one thing to say, which is that the theory that the charter school concept was based upon, was—and there are a lot of theories people toss around, but this is the one that stuck with me the most—is the fact that if you allow for the funds to follow students to the school of their choice, ultimately the best schools will attract more students to these schools and get rewarded with more money, will be able to expand, and the bad schools will have to shut down.

You have to remember that concept and try to help us make the case for that concept, because here you’re no longer part of just the school that created you or the CEO who had a vision to create your school; you’re part of this larger movement that really needs you to help make the case for more choices in education, and for more sort of formula programs that allow for funding to follow children to the school of their choice.

Your reaction is one of, I already have enough on my plate that I can’t do any more than I’m doing, then it’s very hard for us to get on the federal level to make the argument that choice and creating independent schools will ultimately reduce the number of poor performing schools. Because the argument back at us is always going to be, look, these schools don’t want to expand; no one is there to help them expand.

So we still have to go back and fix the failing schools, because a lot of people are just going to be stuck in those schools forever.

And lastly I’ll spend a few minutes on some of the negative reports that have come out recently. And I’m of course very biased, I think most of the studies are bunk and we should not be paying any attention to them. But in all honesty, starting with the AFT report, which is something that I’ve studied a little bit more carefully than the Ladd report, but the key thing that we have put in place at the US Department of Education is a very high bar for research—we call it the gold standard of research—which relies on the same kind of trial and error test that you do in medical research.

The test is called a randomized field test. So in our opinion, the best study that you can possibly do in order to see if an education treatment is effective, had reasons to which we’ve met, is one that has a control group. And in the case of charter schools, because most charter schools have oversubscription, people easily fit in the control group by going into the school and following the students who then got into the charter school, compared to the students who wanted to get in but were unable to. And then following each subgroup for a period of time.

Only if you do that will you be able to see if there was something about that particular charter school that was effective at raising or reducing student achievement. Because you have a net control group that’s identical to students with the charter school, and you’re controlling for a very valuable factor which is called “parental involvement and interest”. If you don’t have that, you’re never going to be able to make a perfect comparison.

So unfortunately not the AFT report, nor the Ladd report are relying on the randomized field test. There’s only been one study so far using a randomized field test. It was done by Caroline Huxbee from Cambridge University, and looking at Chicago charter schools, and she did find that the charter schools in Chicago did better academically compared to their counterparts.

We’re doing a study at the federal level, which is taking forever. Also using a randomized field because it’s very expensive, it’s going to be very time consuming.

But also again, we feel that it’s going to be the first national study of charter schools using this kind of control group.

So again, whenever these studies come up, and I think you can get bogged down in the details and it’s important to do that, to define research to debunk some of the myths set forth by the researchers, but at the same time know that nothing is ever going to be definitive so long as you don’t have a control group.

The second thing that’s kind of interesting to point to is that even if you were to do a perfect study, you’re always going to have some anomalies when it comes to charter schools because most of the parents when they’re taking their children out of public schools, enroll them in charter schools, are taking them out because of a specific problem that their child is having in that public school system.

So you’re never going to be able to compare Johnny to Bobby simply because they’re both African-American, disabled, from a single-parent family…these indicators are never going to be exactly the same because, again, parents taking the child out of the school because that child was not happy and may not be doing well in the long run.

You can’t just compare them to someone else when they are staying in the school just because they’re competing academic and their racial makeup is identical. So that’s just something that parents know what’s going on, that they know why they make a choice. A lot of times it’s for safety and discipline and other reasons besides academics.

But it’s important to sort of keep that in the back of your mind, because ultimately we need to know who your ultimate customers are. And in your case it is the parents. So regardless of what study is being tossed out, the people that you are ultimately going to be accountable to, you’re going to keep your doors open to, are the parents.

So it’s important to keep that in mind and understand why they’re important to you, and make sure you work with them as much as possible to keep their needs in mind.

And lastly, and this is kind of nitpicking a bit, the AFT study, which is kind of a snapshot with using national data, and one of the things that they didn’t really prove is whether there was something about charter schools that leads to the poor performance of schools on a national system of educational progress.

So it doesn’t really tell you anything except the fact that the students who were in charter schools are not doing well academically; it doesn’t have any kind of other—it was baseline research so there’s nothing else you can look to from four or five years that really compare the performance of charter schools today to those five years ago on the issue of performance.

So to that extent it’s a little difficult for them to jump into any kind of conclusions. In the case of the Ladd study, and again I haven’t studied it as carefully as I should, but it seemed that they also had some missing data in the public schools. So they haven’t accounted too much for the students who are leaving the public school system, where they’re going, whether it’s private or home school.

I just want to close with one general comment which is that your ultimate goal regardless of studies and everything else that I’m saying here, is serving the students that you’re serving.

I think in a lot of cases most charter schools are specialty schools and they were created to meet the specific needs of individual children, so there is never going to be a perfect study of any kind that’s going to be the definitive study that says you’re school is fantastic. The people that are going to rate your schools to be great schools are the parents.

But it’s your job to make sure that you’re serving all the kids that are coming to you and that the ultimate goal ought to be to improve education. That, at the end of the day, will help us on so many different fronts, not just in selling the concept of charter schools, but also selling the idea of an education system where all kids can learn.

That has not happened yet unfortunately. We haven’t been able to use the lessons of charter schools to help us educate what’s happening in the public school system.

So anyway, thank you for having me. Linda would suggest that I take questions. I’m happy to take questions.