School Choice & Charters Opinion

The Charter-School Plus

By Terrel H. Bell — March 15, 1995 5 min read
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In 1981, I appointed a national commission that conducted a nationwide study of the condition of American education. This resulted in the 1983 report A Nation at Risk. Since that report, educators have been searching for ways to dramatically change schools as a response to the demands of an increasingly critical constituency. If there has been any ebb in the rising tide of mediocrity described in A Nation at Risk, it has not been recognized in corporate boardrooms, states legislative sessions, or election-campaign literature. Good as our schools may be, they are not good enough to silence the criticism of those who pay taxes, set policies, and appraise results.

Unfortunately, over the past 12 years, the relentless search for more effective schools has yielded a few encouraging results but many highly visible failures. In all this questing for new curricula, technologies, and methods, both the cost and productivity of education have become high priorities for business executives, governors, and lawmakers. They are the ones who face foreign competitors, demanding voters, and escalating costs. These leaders sometimes view school leaders and their governing boards as rigid, tied to past practices, and not capable of bringing forth new solutions.

Various attempts have been made to bring the advantages of our free-enterprise system to education. Vouchers have been advanced as a means of offering choice and competition for “customers” in the schools. Public funding of tuition for parents who want to send their children to private schools has been tried. Parental freedom to choose schools, it has been reasoned, will bring competition for market share; and this will tend to stimulate new ideas to be applied in a new search for higher quality and lower costs.

Out of these past efforts, the charter-school idea has emerged as possibly the most promising innovation. The concept is very simple: Create independent legal entities, charter schools, and give them authority to operate schools as autonomous organizations with freedom to experiment and test new and creative solutions to problems that have been obstacles to school reform.

At least 14 states over the past five years have legislated and enacted new laws granting the authority to issue charters. Under these laws, certified teachers, groups of parents, private companies, or combinations of these groups may apply for a charter. If one is granted, these groups enter into an agreement with a local or state board of education to establish organizations with legal and financial autonomy. Armed with a charter to enter the school business, these educational entrepreneurs may create and operate their own schools. Charters are usually issued for a definite period of time. Charter holders must account for public funds they receive (usually based on a per-pupil-expenditure formula), and they are accountable for meeting certain educational-performance standards.

Charter schools are, however, legally and financially autonomous--essentially small businesses. Therefore, local school boards and other charter issuers have new roles and responsibilities as they relate to many different charter holders. The board becomes a purchaser of educational services from these charter-school providers. Assessing results, appraising costs and educational benefits, and choosing from among competitors for charters are some of the new responsibilities of school boards under these laws. (See related Commentary, page 29.) If charter schools do not measure up to their contracts, boards can choose not to renew the charters.

The roles of governors, lawmakers, and even private companies have also been changing under the influence of this rapidly developing private venture into education. For example, a candidate for governor in today’s political arena must have an education agenda. Bold new ideas on how to “fix the schools” are expected. Lawmakers fix tax rates, apportion funds from revenues that are never sufficient, and face special-interest lobbyists representing large blocs of voters with conflicting ideas.

In the business world, corporate executives simply want better schools. The success of our corporations and especially their capacity to compete in the international global village of commerce and trade requires well-educated employees with the skilled intelligence needed in this era of information and technology. Companies look to school boards, superintendents, and all those involved in the education community to meet these needs.

The quest for more productive schools makes sense from the viewpoint of economics. From the results of the 1990 U.S. Census we learn how much education pays those who pursue higher learning. A person without a high school diploma earns less than half the average salary of a high school graduate with no job skills. College graduates command salaries three times those of employees with only a high school diploma. Apply these numbers to what we know about the impact of higher wages on the total economy and the conclusions for businesses, large and small, are obvious: Education pays, and education yields profits in our free-enterprise system. Given these plain facts it should surprise no one that many companies are becoming directly involved in the quest for more effective schools.

Some see charter schools as a new business opportunity, while others simply want to influence schools to shape up their operations and produce the skilled and creative people needed by companies to stay competitive and profitable. Most companies live and die by the so-called bottom line, and they believe motivation to achieve is missing in the schools because educators lack the competitive spirit that comes from actually having to compete. This seems foreign to many educators, but it is a way of life in the business world. Our colleagues in the business arena cannot understand what they perceive as a reluctance to build incentives, bonuses, and a system of rewards and recognition in education.

The charter-school movement has emerged from all this searching for a means of keeping our public schools under public control while bringing forward the spirit and essence of competition, profits, and entrepreneurship. From experiments in other fields of government, we have learned that many public institutions often become more efficient and productive when faced with healthy competition from the private sector. This knowledge has given birth to the charter-school movement, which is now beginning to gain momentum in state and local school systems.

All of this, of course, offers radically different approaches to managing public education. Once it is approved, a charter school is an independent organization with broad powers. It must live up to its charter and be accountable for results; but it operates as a small business with government charter and sanction. This creates a new force in the education arena that I predict will grow and expand its influence in the world of teaching and learning.

A version of this article appeared in the March 15, 1995 edition of Education Week as The Charter-School Plus


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