<html><body>American Enterprise Institute December 15, 2009 [Edited transcript from audio tapes] <TABLE cellSpacing=1 cellPadding=1 width="100%" border=0> <TBODY> <TR> <TD> <DIV class=BodyText>2:45 p.m.</DIV></TD> <TD> <DIV class=BodyText>Registration</DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>3:00 </DIV></TD> <TD> <DIV class=BodyText>Presenter: </DIV></TD> <TD> <DIV class=BodyText>Kevin Welner, University of Colorado at Boulder</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Discussants:</DIV></TD> <TD> <DIV class=BodyText>Kevin Chavous, Sonnenschein Nath & Rosenthal LLP</DIV> <DIV class=BodyText>Adam Schaeffer, Cato Institute</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Sheila Simmons, National Education Association</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Moderator:</DIV></TD> <TD> <DIV class=BodyText><A class=eResources href="http://www.aei.org/scholars/scholarID.30/scholar.asp">Frederick M. Hess</A>, AEI</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>4:30</DIV></TD> <TD> <DIV class=BodyText>Adjournment and Wine and Cheese Reception</DIV></TD></TR></TBODY></TABLE> Proceedings:   Frederick Hess:  Hello.  I m Rick Hess, director of education policy studies at the American Enterprise Institute.  I d like to welcome all of you here today for this forum on The Next Frontier in School Choice: Tuition Tax Credits? Tuition tax credits, as most of you are aware, are programs that use a tax code to help individuals and corporations make available dollars for the education of children in K-12.  State requirements regarding eligibility vary.  State rules as to who is allowed to contribute money vary.  State rules governing the amount of the tax credit, including how much of it is actually refundable, vary state to state.  We re going to hear a bit more today about all of these design features. Proponents of tuition tax credits see great promise in tuition tax credit legislation.  Clint Bolick, today a director of the Scharf-Norton Center for Constitutional Litigation at the Goldwater Institute, formerly co-founder of the Institute for Justice, has remarked, The political fire has been aimed at the voucher portion of the education program, when in reality the tax credit part of this bill could have a much larger real world impact.  It may be that extending tax credits would be a politically easier way to advance school choice.   On the other side of the debate, critics have been equally emotive.  A U.S. Supreme Court brief by the Arizona Education Association and the Arizona Federation of Teachers opined that the tax credit is a thinly disguised use of the tax code as a means of transferring public funds to the coffers of private, mostly sectarian, schools.   So what we see here are strong feelings on both sides of divide about the possibility of tuition tax credits to greatly extend school choice and choice-based reform, and, among the critics concerned, that tuition tax credits are going to undermine public schooling and public school funding. Today, we have a panel of folks who have thought long and hard about these issues and who are going to share with us both their takes and some sense of how we think about the landscape ahead when it comes to questions of tuition tax credits and the larger question of school choice. Speaking first will be Kevin Welner of the University of Colorado at Boulder.  Kevin is going to be speaking largely about his new book.  He is the author of several books but just out this fall is his volume NeoVouchers: The Emergence of Tuition Tax Credits for Private Schooling.  It was published by Rowman & Littlefield just a couple of months ago.  Those of you in attendance can find book ads in your folders and those of you at home will be able to find it readily at amazon.com.  Kevin has received awards and fellowships from various parties, including the American Educational Research Association s Early Career Award, the Rockefeller Foundation s Bellagio Residency, and a postdoctoral fellowship from the National Academy of Education and the Spencer Foundation. Speaking second will be Adam Schaeffer of the Cato Institute.  Adam is a policy analyst at the Cato Institute s Center for Educational Freedom.  Previously, he was a National Research Initiative fellow here at AEI and an adjunct scholar at the Mackinac Center for Public Policy.  Adam has also commented on a wide range of school choice, voucher, and tax credit policy issues in publications including the Wall Street Journal, USA Today Magazine, and National Review Online. Speaking third will be Sheila Simmons of the National Education Association.  Sheila is the director of the human and civil rights department at the NEA, where she leads the dropout initiative.  She joined the NEA in 1985 and has served in various capacities including directing the Center for the Advancement of Public Education.  And prior to joining the NEA, she was a classroom teacher, school administrator, higher education administrator and a faculty member. And speaking fourth and finally will be Kevin Chavous.  Kevin is a partner at the law firm Sonnenschein Nath & Rosenthal.  He is a distinguished fellow at the Center for Education Reform.  He is a co-founder and board chair of Democrats for Education Reform, and he served as a member of the D.C. City Council from 1993 until 2004, including his tenure as the chair of the Council s education committee, in which capacity he helped shape the city s first student scholarship program.  With that, Kevin, I m going to turn it over to you and ask you to please get us started. Kevin Welner:  Thank you, Rick, and thank you all for coming.  Today, we re all going to be talking about a new approach being used more and more to provide private school vouchers.  The approach that I call neovouchers uses a tax credit mechanism to offer state financial support, an approach that I ll explain more in a minute.  But let s start in Arizona, which is where the policy was created back in 1997.  These quotes from pro-voucher state legislators are from several years later, after the policy had been in existence for a few years.  Talking about the neovoucher law, they said this has turned into something so close to vouchers that you almost can t tell the difference, and why do we need vouchers at this point?  As we shall see, five additional states asked the same question and adopted neovoucher policies and more appear likely to do so in the future, and today we re going to explore why that might be. The main points that I want to focus on today are shown here, and as opposed to the book which offers a more balanced approach to all sides of the neovoucher debate, I think my role today at this event calls on me primarily to be a critic.  So these points, at least the middle two, really try to raise some of the issues that I think are important in terms of critiquing this policy. So the first point is purely descriptive but I think a very important one for us to keep in mind.  Neovouchers are in fact more common than conventional vouchers.  There are more of them, and I ll get to that in a second.  They re also unproven, largely unstudied and largely beyond the reach of solid evaluation.  The third point is that one of the things that we actually do know about these neovouchers, as compared to conventional vouchers, is that they generally transfer authority from recipient parents to wealthier taxpayers and also that they tend to benefit wealthier parents.  And then finally, I want to discuss the fact that neovouchers are more likely to withstand court challenge and more likely to garner political support.  Although much less well known and understood than conventional vouchers, neovouchers actually dwarf conventional vouchers in terms of their scope, shown by the numbers here.  Almost twice as many students receive neovouchers as compared to conventional vouchers.  And while this picture is changing, the change seems to be in the direction of even greater dominance for neovouchers.  For instance, the Florida figure for this school year, 2008-2009, is actually 22,000.  And by the way, this table doesn t include some small and new voucher and neovoucher policies.  There is a new voucher policy in New Orleans, there are some small voucher policies addressing foster kids and kids with special needs.  There are also new neovoucher policies in Iowa, Rhode Island, Georgia and an additional neovoucher policy in Arizona. So what are these things?  Here is a graphical representation of the differences between the two different types of voucher mechanisms.  So you see -- with the tuition tax credit systems, there are two added steps.  Conventional vouchers offer parents funding for tuition at nonpublic schools.  Tax credit vouchers, what I call neovouchers, rely on a more complicated process whereby a taxpayer donor donates money to an organization that then bundles those donations and hands them out in vouchers to parents to use at nonpublic schools.  And then what happens is the state steps in: the taxpayer donor receives all or part of that donated money back from the state in the form of a tax credit.  In Georgia, Florida and Arizona, those tax credits are for 100 percent of the amount donated so the taxpayer ends up simply diverting some or all of the taxes owed to the state to fund these vouchers.  And in the other states, the amount of the tax credit ranges from 65 to 90 percent.  Note that in some states, the policy applies only to corporate taxpayers and some states, only to individual taxpayers, and in two states, corporate and individual taxpayers. Now later on, I m going to focus on the potential legal advantages, but first let me touch quickly on some of the potential political advantages of neovouchers. The first thing that we should note is that the less transparent approach that you see with these added steps allows neovoucher advocates to focus more on the parental choice argument relatively unencumbered by the baggage of past voucher battles.  But there is also a structural advantage, since the tax credit legislation is generally introduced into the Ways and Means or Appropriations Committees of the state legislature, bypassing the Education Committees that are oftentimes much more skeptical of voucher ideas.  But the new mechanism also generally changes some key elements of control over which schools get the vouchers.  In a conventional voucher system, parents alone decide where to enroll.  But a neovoucher system, because of the added steps, can shift effective decision-making authority away from the parents.  The dotted arrows in this slide show the influence that donor taxpayers and the donor organizations can have over which schools end up with the voucher money.  Even though the solid arrows here continue to show the parent making the decisions about the private schools receiving the voucher money, the reality with neovoucher policies is that parents roles in the neovoucher process are largely subordinated to decisions made by donor taxpayers and the school tuition organizations that they donate to.  Simply put, the parent can t choose to obtain a neovoucher to attend a school that s not sufficiently supported by the donors.  By the way, the exception here is Florida which actually has a lot that s structured in a way to limit the donor authority.  By the way, note the question mark in this slide.  The question mark is between the arrow from state government to taxpayer subgroup and what that s referring to is a key point of legal contention, and it s these legal issues, more than anything else, that give neovouchers a potential advantage over conventional vouchers.  Even after the U.S. Supreme Court s Zelman decision in 2002, concluding that Cleveland s conventional voucher program does not violate the federal establishment clause, neovouchers have had the potential legal advantage due to appropriations clauses often called Blaine Amendments included in the constitutions of 36 states. To give you an idea of the wording of these provisions that prohibit using public tax funds for religious schools, here s some language from the California Constitution.  Note the discussion of public money and of appropriations.  And here s a key passage from the 1999 Arizona Supreme Court s case, Kotterman versus Killian, rejecting a challenge based on the states appropriations clause.  No money ever enters the state s control as a result of this tax credit.  Nothing is deposited in the state treasury or other accounts under the management or possession of governmental agencies or public officials.  Thus, under any common understanding of the words, we are not here dealing with public money.   So here we see the importance of the wording in these state constitutional provisions which prohibit expenditures of public money.  The tax credit approach provides a mechanism to circumvent that provision.  But of course, the practical effect of the approach is almost identical to that of conventional vouchers, which do include a direct expenditure of public money.  As we say in the law business, the Kotterman court relied on a distinction without a difference.   In doing so, the court had to reject a commonly applied idea called the tax expenditure doctrine.  In a nutshell, tax deductions and tax credits have, since the late 1960 s, been treated the same in federal government accounting as direct spending is.  This is because the tax expenditure has the same budgetary effect as a direct expenditure.  Now, I don t have time -- I just have a couple more slides here.  I don t have time to address most fiscal issues dealing with -- related to neovouchers.  Suffice it to say that the opponents and advocates disagree strenuously and that the neovoucher laws are all written in such a way that we ll never really know the overall fiscal effects on state budgets, and I d be happy to explain why that is later.  But I do want to touch very briefly on the issue of switchers -- students prompted by the availability of vouchers to move from public to private schools.  The 19 percent figure you see here in the slide is from work done in 2001 by Glen Wilson in Arizona but they re up in similar estimates by others including advocates of neovouchers.  And what the 19 percent figure means is that the state takes a financial hit on 81 percent of the neovouchers issued, and let me quickly explain why that is.  Because of the neovoucher policy, the state provides subsidies for the private education of those students who would have attended private school even without those subsidies.  To the extent that these students are from low-income families who are struggling to pay tuition, there is still a recognized policy goal here, but the Arizona studies also suggest that most of the recipients are in fact much wealthier than that.  And part of the reason for this distribution of neovouchers in Arizona is simply because the program isn t means-tested, and by the way, neither is the Georgia neovoucher law.  There is no requirement either law or even a preference for vouchers to go to lower income families.  But part of the reason is also related to the nature of a tax credit mechanism itself which tends to result in the allocation of tax benefits to support those institutions that are most popular with the state s wealthiest residents, and that s what s being shown here.  This is from five years of Arizona tax records and what you see here is that approximately two million taxpayers have taxable income above $40,000 and about 6.7 million have taxable income below $40,000, and the reason why that s important is because to get the tax credit, you have to itemize your deductions, and this shows the odds of itemizing increasing drastically after the $40,000 level. Finally, one of the things that is most troubling to me as a policy analyst is that it is foolish for policymakers to adopt neovoucher laws that do not allow for empirical determinations of whether the laws are working, whether they re providing academic benefits.  The data collection and evaluation elements of the existing laws -- and Florida is an exception to this -- are very minimal.  So not only do the laws not provide for quality evaluations, they actually don t even provide for the data reporting that would allow for independent quality evaluations to take place at a later date.  So those are the conclusions that I want to stress again.  I m looking forward to hearing from the others in the panel and discussing this in greater depth.  Thank you.  Rick?  Adam? Frederick Hess:  Thanks Kevin.  So just to make sure that everybody s on the same page coming out of just a really dynamite overview of the set of questions on the table, that currently, tuition tax credit programs are operating in six states.  Those six states are Arizona, Florida, Pennsylvania, Rhode Island, Iowa, and Georgia.  Georgia was the most recent addition to that list having enacted its legislation in 2008, and nationwide, as Kevin just noted, we re talking about roughly 100,000 students taking advantage of tuition tax credits at the moment? Kevin Welner:  That is correct, yes. Frederick Hess:  Okay.  All right.  And with that, Adam. Adam Schaeffer:  Thanks, Rick, for having me here and thanks to Kevin for writing what I think is a much overdue book on an important topic, obviously, and a lot of people aren t aware of tax credits, so I really enjoyed it.  I mainly had disagreements in the policy prescription section which is probably no surprise, as you re coming from an education school, and I m coming from Cato Institute, a libertarian think tank. I wanted to focus on the policy prescriptions at the end of book because I think you tried to address a lot of your concerns with the equity implications and some other hesitations in these policy prescriptions.  The one that stands out to me most I think because it s kind of on its face the most unremarkable and a part of all current laws but I think undermines one of the most important aspects of tax credits is no earmarking of tax credits.  In other words, you can t designate a particular recipient to receive a donation that you give and receive a tax credit on.  And that s done to preserve the charitable aspect of the program, I think, and make sure that it s spread out over people according to need. But one aspect of credits I think that is overlooked is the community and family building aspects of credits.  It spreads a responsibility for education across society and particularly in lower-income communities, one of your concerns is that low-income parents might have to rely too much on a few scholarship-granting organizations to the extent that grandparents, relatives, friends can donate money to help a family out, I think that diminishes that concern significantly and could be used, I think, to buttress what we all know is the foundation of a good education which is the family and the community that people live in.  So I think there s a lot of potential there that earmarking can bring to a tax credit program. The other main area is I think in the finances of the programs.  Most programs call for an overall credit cap on tax credits which all the programs currently have and that also seems reasonable -- you don t want to have a program that could bust the budget, and all of a sudden you re spending millions or even billions of dollars on a program and much more than you thought you otherwise would.  Again, I think there are other ways to address that concern and applying a limit to each child, I think, is a much better way to go.  For instance, you can attach a certain amount of money to, say, a low-income child gets 80 percent per pupil public spending.  If public schools spend $10,000, they can use up to $8,000 in credits to go to a private school, and you ensure that each switcher is actually saving money for the public school system and the taxpayers at large, that way you limit the overall impact of the program.  In fact, the bigger it gets, the more money school districts and taxpayer save but you don t limit the overall demand or ability of parents to choose an alternative education.  Same with the taxpayer credit cap which caps the amount that any particular taxpayer can give to a scholarship-granting organization.  Again, a lot of people aren t going to know about the program, aren t going to care about the program.  You want to, I think, give taxpayers as much leeway in donating and supporting alternative forms of education as is possible. The scholarship that s full payment, though -- I think was probably my biggest hang-up.  That simply means that a lot of voucher programs designate a certain voucher price, say, $4,000, $5,000, $8,000, and the school who takes the vouchers has to take that as full payment.  They can t top off, can t pay anything extra.  This is price control and price fixing, and when you do that, you set a ceiling but you also set a basement, and you basically encourage schools that would ve given an education for $4,000 or $5,000, which a lot of parochial schools do -- they have every incentive in the world to raise that to the voucher limit.  So I think that s kind of an overview of some of the main aspects that I wanted to point out. The final one, I think, is this notion that there s no real difference between tax credits and vouchers, that it s just a shell game or some way to avoid some legal problems with vouchers that tax credits slip by.  But in fact, I think the courts are recognizing a real difference here, that taxpayers and not the government is deciding where their money goes.  It s a real difference to individuals who take the home mortgage deduction and it s a real issue to people who take housing vouchers; it s a different thing.  Section 8 Housing is direct government spending, and people perceive it differently and I think they should because keeping your own money is not the same thing as all your money going into a public pot and being doled out from there.  So I just wanted to highlight that taxpayer aspect of it. Again, I m going through the things that I have the most issues with because I think overall, the book was a great and pretty balanced review of the programs out there and the policy issues that we face.  I m sure we ll have a lot to talk about in the discussion. Frederick Hess:  Adam, just one point of clarification before we go to Sheila.  As somebody who s written a fair bit about tuition tax credits, as somebody thinks they re a good idea and at Cato, of course, which is known as one of the nation s leading advocates for vouchers and education, how do you weigh the merits of vouchers and tuition tax credits?  Do you personally find one or the other approach more preferable from a policy perspective? Adam Schaeffer:  Well, I think I maybe alluded to that and danced around the issue.  I think tax credits are preferable for a host of reasons, some strategic, as you pointed out, but moreover the legal aspect, which is I think the most important concern from a strategic standpoint -- a number of voucher laws have been overturned by the courts for violating various clauses in state constitutions that restrict where government money can go in terms of religious institutions.  But that also recognizes the fact that taxpayers have control over their own funds, hat you aren t compelled to support or say, a religious organization that you disagree with, that if you re a secular person, you can fund secular education, or that you can simply move your money around according to how effective that educational institution is in helping the children.  So I think it diversifies the number of players involved in education and integrates a wider community and many more people into our educational system, which I think everyone would support. Frederick Hess:  Sheila. Sheila Simmons:  Good afternoon, and thank you for inviting me to be a part of this panel, and it s really interesting.  I feel very honored being here with all of my gentlemen colleagues here.  So, thank you. What I d like to do is take a different approach.  First, I wanted to say to Kevin that I m glad to see the book.  I think that the book has brought out a lot of information and particularly talked about the fact is a voucher is a voucher is a voucher, basically.  And what I d like to do is to really focus on: what do we need to do to improve public schools where the rubber hits the road?  What s working?  What are we for?  But also give a little insight in terms of the work that I ve been doing, particularly in urban schools -- some rural schools, but particularly in urban schools.  When we talk about what s working, in terms of programs and funding and recruitment, the training and the retaining of the best teachers of our students, smaller class sizes so that these teachers would be able to give the type of individual attention that many of our students need, high quality early childhood education because the fact is so many of our children come to school not ready to learn but we need to make sure that they are --  What s working is the before and after school programs that include mentoring and tutoring and particularly for those students who have fallen behind and we don t want to leave them behind.  What s working is the active involvement, and I really want to stress this because I think this is downplayed a lot, the active involvement of parents and the community in making sure that there are great public schools in all of the communities. Now, I want to talk a little about the policy and the practice side of this because we have been doing a lot of work and that s where our commitment is in looking at the policy and practice side.  In terms of policy, I think that it s very important that we begin to look at securing public policy to close the achievement gaps, and we have had some success in securing 36 pieces of legislation in 22 states in the last year-and-a-half.  Now, many of these policies have actually addressed the reasons why I know that public schools can and must change to make a difference in students lives.  Some of them deal with the issue straight with state legislation, i.e., we are working in the State of Illinois where we have a coaching and mentoring program, both for teachers and for principals, because I think that that is very important when we look at this work that we re doing.  Another way of securing public policy has to do with looking at the state statutes, changing state statutes so they can begin to address exactly what is happening in the local schools and those school districts.  And the third one is one that deals with district policy, i.e., collective bargaining.  We have changed public policy in several states particularly in New Mexico but also district policy, for example, in the city of Seattle where they have bargained to close the achievement gaps in five years.  That is the centerpiece of their collective bargain language.  So when we say security in public policy, those are the kinds of ideas and particularly legislation and changes we ve made.  Now, looking at practice, and I want to point out to you that the issues that I m going to bring up have to do with the what s going on particularly in the urban areas and many times where we see the push for vouchers.  I want to suggest that if you look at what are the outcomes that we want in any school as a baseline& But I want to talk about three places quickly: Hamilton County, Tennessee, Seattle, Washington and Milwaukee, Wisconsin.  We are working in these three school districts and in about five months, we will expand it to eight more school districts.  Well, we have been working in these school districts anywhere from three to five years, and five years being Hamilton County, the longest.  And what we have done, we have worked to eliminate the achievement gaps by looking at greater participation and a more rigorous curriculum, particularly at the middle school and at the high school level, increasing the participation of students, particularly in gifted and talented and AP courses, because that s very important when we look at these issues around what s happening.  But above all, we have increased the reading and math achievement scores of students in all three of these sites.  In Hamilton County, the schools here have had more than any of the other areas but particularly, in Seattle and in the other districts, we have had examples where we have seen the average even high at the state level.  But lastly, let me just say the issue around looking at transforming public education, that is critical and if we re going to transform public education, it has to be a collaborative effort.  It has to be an effort that looks at what s happening in the governor s office, with the chief state school officer, the community, and yes, with the teachers.  In doing so, we have brought about a five-year initiative where we re going to look at changing schools, making great schools for every student by 2020.  I look forward to having more discussion but I really want you to think about what it is we can do to make all public schools a great school. Frederick Hess:  Okay.  Thank you, Sheila.  Kevin? Kevin Chavous:  Thank you very much.  Thank you, Rick and to all the panelists.  I appreciate you working on behalf of our children.  And I want to start off by mentioning children because it hasn t been mentioned today and I think that s why we re all here. There are several issues with respect to the tax credit phenomenon relating to constitutionality and legalities and the like, but similar to Sheila, I wanted to frame our discussion in a different way or re-frame the discussion.  Because I think that the ultimate question is, what is our goal as we develop policy in this area, in this arena?  Is the goal to preserve our current system of public education?  Is the goal, as Kevin suggested in his book, making sure that there s democratic control over our educational system?  For me, while those things are important, the primary goal is the educational outputs of our children.  And if we want to make sure for instance that there s some measure of democratic control over our educational system, which is oftentimes one of the clarion calls that we hear when people rail against the idea of parental choice or school choice, I think one of the starting points to re-frame the discussion is understanding how public education came to be.  You know, when Thomas Jefferson planted the seeds for public education, he felt it was important for citizens to be able to read, write and count, understand arts and science so that they could appreciate and participate fully in our participatory government.  They needed to understand their responsibilities and rights as citizens, and every major democratic thinker since Thomas Jefferson has agreed with that notion and it led to our first compulsory attendance laws under Horace Mann in Boston back in the 1830 s.  But keep in mind, as these compulsory attendance laws grew over time, that they were put in place largely during the Industrial Revolution.  That s where the nine-to-three school day model took hold so that kids could work in the field before they went to school at nine and work in the field at three before the sun went down after three.  The weekends were off.  The summers were off for that same reason.  Even the curriculum design was designed back then.  The curriculum design that we see in most of public schools is the same as it was back then.  Students divided according to age and subjects placed before students at certain ages hasn t changed.  Most of us took algebra at ninth grade as did your great-great grandparents.  At the time this system was put in place, there were no cars, there were no planes, there were no computers, there were no electric lights.  I give this as a point of reference because the current system that many of us celebrate and many of us come from has virtually been unchanged over the past 150 years and the end result is that it is not working for all children.  The Schott Report, which is a report of the study of African American males -- that is by some researches in Massachusetts, it comes out every year -- the most recent Schott Report relates statistics that are startling and incredible in this great nation for us to have these results.  There are over 25 school districts where the African American male graduation rate is under 40 percent, 25 urban school districts.  There are more than 25 others, worse, between 40 and 50 percent.  The lowest is my hometown, Indianapolis, where I was born and raised, where 19 percent of the African American boys who enter high school graduate; that means 81 percent do not graduate.  In Detroit, 20 percent of the African American boys that enter high school graduate; that means 80 percent do not graduate. Now, we all know about the achievement gap and I m not going to celebrate what I m about to tell you but the achievement gap has been cured in those two cities because the white male graduation rate in Indianapolis is the same as the black male graduation rate, 19 percent.  And in Detroit, where the black male graduation rate is 20 percent, the white male graduation rate is 17 percent.  So I guess there s no achievement gap when no one s learning.  I do believe that part of the solution is not just more of the same.  Yes, teacher training and development is important.  Lower class size is important.  But in this new age where the new global economy suggest that there should be a different way of looking at things, we should also look at other options, other tools in the toolkit if you will, to help children learn, and that leads me to the notion of tax credits. See, to me, tax credits from a public policy point of view, is not just the celebration of the tax benefits of the wealthy.  It is creating more and more options for parents to be able to put their children in the educational or learning environment that works for them, period.  It s not a validation of one system over another.  When Rick asked the question, which one do you prefer, vouchers or tax credits?  Let me tell you something.  I have a simple view of this from a public policy point of view.  Whatever is going to help our children learn so we can go from 19 percent graduation rate in Indianapolis, let s try to get over 50 percent, then I m for it.  And I think there is precedence for that in this country.  This TARP legislation which several years ago, several months ago will be unheard of in terms of having the federal government infuse money into our corporate banking systems and then take a stake out of it -- people would run to the hills complaining about that.  But under a set of crisis circumstances, people are more open to innovation and creativity, and that s how I view some of these measures.  When you re dealing with the dire straits and the realities that exist for a lot of children who have these educational deficits and these poor outputs in some of the traditional schools, then there is absolutely nothing wrong from public policy point of view to explore some of these other things. Finally, let me say this.  There are precedents out there for public money being used for private educational needs of citizens.  The G.I. Bill, when folks came home from World War II and they wanted to make sure that some of the soldiers get educated, then federal money was used to put some of these servicemen into private schools.  Pell Grants.  And even -- and I can tell you this from firsthand experience when I was chair of the education committee D.C. council, many of our special education programs.  We spent as much as $70,000 per child in the District of Columbia for some of these acute special needs children to place these children in private schools.  This was local money but you know why we did it?  Because we weren t offering the services, folks went to court, and the kids were entitled to the service.  It is my point of view and my perspective, the lens I place on this whole issue, that all children are entitled to received a quality education and if there s such a precipitous slide in terms of the outputs of these children, then there is absolutely nothing wrong with reaching into that toolkit and grabbing whatever is at our disposal to try to cure those deficits.  Thanks, Rick. Frederick Hess:  All right.  Kevin, let s go back to you, Kevin Welner, and let me ask you actually first -- say whatever you want to say but first I d love to hear your response to Kevin s point here about, is this a situation of educational crisis?  If so, why not tuition tax credits?  Where do you kind of come down on this? Kevin Welner:  I do think that there is, for a lot of kids, certainly a subsection of America -- but it s a large and important subsection -- a crisis.  I mean I think that we need to respond to the dropout rates and the life chances differences that we see across America in a way that is similar to the sort of crisis response that we have toward our economy right now.  Where I differ is that I think that when we look to solutions for crisis, we should look to the research base; we shouldn t look to an untested theory and if we do look to sort of new approaches, innovative ways of approaching things, we should do it small scale, study it, evaluate it, respond to the evaluation results in a sensible way rather than moving forward, as I see with the tax credit laws -- in Florida again, the revised law in Florida is now an exception to this -- but otherwise, all the tax credit laws are moving forward, full force, and actually, I think the Arizona individual tax credit doesn t have any cap at all on the total number of tax credits available, and we ll never know whether they work.  We ll never know what their effects are on the state budget.  We ll never know what their effects are at student achievement.  How is that a responsible way to move forward?  Shouldn t we, if we re going to experiment with these things, experiment in a way that makes sense?   Study it, find out whether it works, and then if it works, expand it; if it doesn t work, shut it down. Adam Schaeffer:  As far as experiments, I think we ve been experimenting with school choice for more than 50 years going all the way back with early voucher initiatives.  There has been a number of studies that you review in your book on voucher effects and I think that whereas tax credits are different than vouchers, that the key mechanism there is the choice that it affords parents. And vouchers have been found to significantly increase achievement levels, most typically in African American students, but many studies have shown general trends even when they don t reach statistical significance -- I don t think there s been any study that showed a negative effect.  So with the crisis going on, with so many things that we ve tried over the years that just don t work within this calcified system that, as you point out, hasn t changed in more than 100 years, I think it makes sense to go with what looks to be promising even when these programs that are studied are extremely restricted, as in the case of Milwaukee, which is the most studied.  And we can just look to choice and other aspects of our life.  Choice works in driving innovation.  We don t have to worry about  whether most cars on the road work.  They work because there s a competitive market in play, at least for a little while, until the government takes over.  But it s not an untested system because it relies on the mechanism which is the choice and free actions of consumers and producers of education.  I think that s well tested, in numerous fields, more than anything currently on the table for public education. Frederick Hess:  Kevin Chavous? Kevin Chavous:  Well, when you talk about tested, I look at it the other way.  We know what s not working.  I mean, you don t get those statistics that I ve talked about in a system that s working for kids.  And so there is empirical data like the Schott Report, the NAEP scores, the test scores to let you know what is not working and the only way something can be -- whether you can determine if something is tried and true is to test it.  Look, charter schools right now, which I helped drive to get in this city, represent only three percent of the public school population in America.  Yet, for those who know about the charter school experiment, you would think it was more, based on the level of apposition it gets.  And I was so glad in today s Washington Post when they talked about that it s clear the charter schools are doing better.  It took several years for it to happen, but it wasn t abandoned after a year or two because the autonomy does make a difference.  And so when you talk about what it takes to test something, we know that the precipitous slide, as I alluded to, in a lot of schools, not all of our public schools, we ve got some great public schools, but the essence of parental choice is that you have to make sure that you don t force a one-size-fits-all model on every parent because there are distinctions and differences among children -- just like if you have more than one child, you know that there s a difference between them and some things may work for one child that won t work for another.  So this idea of making sure that this is tested -- how do you find out if it s tested or true?  You ve got to try somewhere.  You ve got to try somehow to put some mechanism in place to make sure it works.  And then finally, let me say this, and we see this with the charter school, anything that is remotely different will get pushed back from the status quo, even if the status quo isn t serving our children.  So I think it s vitally important for us, similar to this TARP example, and I can t emphasize that enough because we did not look to see if this was going to work when it came to the bank bailout.  And I put the same level of importance on the education of our children as I do on the banking industry.  So what we decided was -- and folks rushed around the clock to put some legislation in place that many people say is going to destroy our notion of capitalism -- I think that already, when you re talking about deficits of less than 50 percent graduation rate, we re already destroying our notion of capitalism and what s important to preserve democracy.  So there s absolutely nothing wrong with going through the whole arsenal of tools in the toolkit to see what may make this work for kids. Sheila Simmons:  Let me just say, I have no problem at all going to the toolkit, Kevin, and I think that that s what we have to do and I am not going to sit here and say that there is a reason to maintain the status quo.  I am a product of public education and if, in fact, we had maintained -- if it was the same way that it was when I was here, it would be problematic.  But I want to go back and say that if we re going to pull money from public education when we know that there re things out there that have worked -- they might not be working everywhere and I totally agree and I was glad to see that information about charter schools -- but at the same time, we have to look at the masses of the children.  The masses of children today are attending public education.  Unfortunately, they cannot all go to charter schools, unfortunately they cannot all go to voucher schools.  So what I am suggesting is that what we need to do -- and I say that first we need to change public schools, we need to change public education -- but what I want to stress is when we began to look at that change, let s not just put all of our money on the unproven, without any evidence around student achievement, fiscal impact, the whole notion of capacity.  We have not even talked about the issue of capacity.  If we did, all of the vouchers, whether they were tuition tax credit, the usual kinds of vouchers, most of the schools are at five percent at most.  What will happen to those other students that don t get a chance to go and have the opportunity to attend the other schools?  So I am going to go back to the issue around looking at what are we doing around teacher capacity.  Let s face it.  There is a major issue in this debate; you talk about the crisis -- that s a major issue.  And one of the things, Kevin, I totally agree, around -- no, we cannot keep the same system that we had as we move to the 21st Century skills and looking at what s going to be needed.  We have to have partnerships around what are these new skills.  Now, I know some of you might pooh-pooh the whole issue of teacher training but let me say this: if we don t train our educators in order to teach those 21st Century skills, then who will be doing that? So I don t want to pretend that there is not an issue.  It s an urgent issue, particularly within the urban areas, and Kevin, the work that we have been doing around this whole dropout issue is something that -- you talk about the loss of human capital.  If we continue to lose our whole segment of our community like we re losing African Americans, Latinos, Asian-Pacific Islanders and in a smaller group with Asian-Pacific Islanders but there s a silent minority within that group that are also not doing well in school&   But the other part of that -- what are we going to do together?  It s not about us fighting and it s not about us looking at your way is the best way.   There s an African proverb that says, When two elephants fight, it s the grass that loses.   Let s not let the children lose in this situation. Frederick Hess:  Sheila, let me ask you to just follow up a bit on that one.  If we stipulate the value of high-quality teacher preparation and the need to recruit more effectively, the kinds of sensible interventions that you sketched out, and then if somebody says, Okay, but how about Kevin s analogies?  How about the fact that we liked those things but also, we have the G.I. Bill, we think in terms of Pell Grants, we think in terms of the fact that we use appropriate placements and special education today which is sometimes in rural private schools -- does it make sense to have tuition tax credits available to students when their families are able to identify schools that are going to be a better fit for those students? Sheila Simmons:  You know, I wanted to go back to what Kevin said at the beginning.  He started his presentation off with his conclusions and one of the things that he had in his conclusions is that the tuition tax credits really benefit wealthier parents.  Right now, when we look at the issue of what s happening in public education, it s happening to those students that are not wealthy, those families that are not wealthy.  So again, Rick, it s not so much that I have a problem, that we have a problem with the way this is laid out per se but it s the issue of how are you going to deal with the capacity?  What are you going to do because, still, only a few of those parents and those families will be able to get those credits? Frederick Hess:  Okay, so Adam.  So, let s throw it to you.  Let me ask you -- address a couple of things here.  One, how about this capacity question?  And second, how about the question of how do we know what the financial impact will be or how do we know whether or not this is benefiting primarily children from wealthy families?  How do we sort our way through these issues? Adam Schaeffer:  The capacity issue is a serious one and it s obviously going to take time for private schools to ramp up their capacity, for new ones to open, but if you actually free the money up and give parents control over that money and they start choosing private schools, they will expand.  I would think about opening up a school if there were tax credits, a full universal tax credit.  There is no way I m going to open up a school in the current environment; there re just not enough customers, there s not enough money.  In the current fiscal environment, we have a lot of private school children who can t afford to stay in private schools.  It s becoming a big problem for public schools.  They re having spikes in enrollment.  You have Catholic schools across the country closing, merging.  In D.C., they re talking about changing over to charter schools because they can t stay open.  There s a lot of excess capacity that could be ramped up very quickly, and once you have the flood gates open on money going where parents want that money to go instead of where bureaucrats or school districts want it to go, there s not going to be a shortage of committed, dedicated people who want to open schools and help those children.  As far as wealthy parents or wealthy benefiting: for the tuition tax credits that apply just to individuals for their own educational expenses, certainly, wealthier individuals who obviously have a bigger tax liability will benefit .  But the vast majority of tax credit programs, or what you call neovouchers, donation tax credits -- those benefit exclusively low-income children.  Tell the parents in Pennsylvania, in Philadelphia that are only at a good private school because of the tax credit program there that it benefits the wealthy parent, people who donate, the corporations who donate.  It doesn t benefit them.  They get the benefit of actually supporting kids in their choice of a school that they can actually graduate from that works for them, but I think it s a red herring to put& Frederick Hess:  Adam, let s stay with this just to make sure everybody understands.  Kevin, let s just make sure everybody s clear on how this works.  So the majority of these dollars we re talking about are not families paying tuition and then getting a deduction on their taxes at the end of the year.  Instead it s individuals contributing to a fund or corporations contributing to a fund which then pays for other people s children s education.  In theory, is that correct or how does this work in practice? Kevin Welner:  It s again, as I said right at the very beginning -- each state has a different law and I think that s really important to stress.  Even in Arizona, there are two separate laws with two separate sets of rules ,and so all these things sort of require footnotes and nuances and we need to -- read the book, that s sort of the answer.  In Arizona and a couple of other states, a donor can earmark and actually there s -- Frederick Hess:  And how does that work?  What does that mean? Kevin Welner:  If I have a child going to school, in a private school, I cannot earmark, in any state, for the benefit of that child.  In other words, there s an exclusion against my own dependents.  But what people have done in Arizona is they ve said, I ll donate to your kid s education if you donate to my kid s education, so you can go around that. Frederick Hess:  So you can steer you dollars to a particular child in some of these states. Kevin Welner:  Yes.  And it s also important to note that in Arizona and also in Georgia, there is no income limitation.  There is no means-testing -- the wealthier families cannot only afford to donate and earmark, but they are allowed to target at people in their community and oftentimes their own friends kids and so -- that s not true, for example, in Florida.  In Florida, not only is there means-testing and it s at a fairly low rate, it s at the poverty rate, but you cannot earmark in favor of anyone s child.  And so each state has its own set of rules and it s important to understand the differences.  What I talked about with the income, the thresholds and the likelihood of itemizing, that was for Arizona, so that wouldn t apply to, for example, Florida.  When I said early on that this is more likely to benefit wealthier taxpayers, I m talking about& Every single public conventional voucher program does have a means-testing or at-risk component.  Two of the major tuition tax credits, or neovoucher, programs do not, so that s the distinction I m raising.  By the way, the slide I have up here -- there has so much that s happened since I spoke last but what I tried to do here is to get around the usual arguments we have about what the research says on vouchers.  I have a variety of slides for different issues but the first one there deals with student achievement which has been the issue that people have addressed most in the research.  This is from a recent review of research by Cecilia Rouse of Princeton and she found that in fact, some of the studies do go down to a small negative effect and some of them go up to a small positive effect but overall, in the vast majority of studies of vouchers -- this is voucher, not neovoucher -- the vast majority of studies on the voucher effects, the student achievement outcomes showed no significant effect one way or the other. Frederick Hess:  And where is this study available, Kevin? Kevin Welner:  Where is Cecilia Rouse s study? Frederick Hess:  Yes, is her paper online? Kevin Welner:  I think so, yes.  But it s also come out, or it s about to come out, in a journal but it was released about four months ago. Frederick Hess:  So people could find this at the National Bureau of Economic Research as a working paper? Kevin Welner:  Yes.  And she has a co-author and I apologize to the co-author for not remembering her name. I think it s important to note that some of the research on voucher shows a substantial, a significant positive effect on student outcomes for subgroups, but overall& Frederick Hess:  Well, let s not get into this because I m sure Adam will come back with questions about which studies are in and out. Kevin Welner:  It s important to know that there s a disagreement about this issue.  I didn t want to let Adam& Frederick Hess:  Sure.  Let me ask you, I want to come back to -- Adam Schaeffer:  I just want to say, not just to the voucher program but just the mechanism of choice in general and the mechanism of opening up a highly controlled, top-down system to choice, I think that s more of a proven mechanism than vouchers very specifically or tax credits. Kevin Welner:  To some extent, I guess the research on competition, which is the second figure I have there and it really -- I think it s really important ,and this ties in to my earlier statement, it s really important to research these things so that we have some empirical grounding for these arguments.  And so when we talk about not wanting just more of the same, which I believe was the statement made earlier, I think we can all agree we don t want more of the same in places that are doing very poorly.  But shouldn t we be looking at what works?  Instead of just saying. here s a new idea, let s try it and by the way, let s expand it without testing it, shouldn t we try to find what works, expand that, and if we re going to try something innovative, study it and then expand it or close it down?  And I keep coming back to that, and saying that does not mean that we re satisfied with the status quo.  It means that this is too important to just leave up to chance, that we need to figure out what works and what -- Kevin Chavous:  But to that same point though, and I mentioned it s fortuitous that the article came out today about charter schools -- when I was chairing the education committee on the city council, we passed the charter school legislation at the end of 1996 and folks came to me, people inside the system, union representatives, and said the same thing: this is unproven, it s untried.  The schools are going to run them up and you shouldn t fund them.   And now we see that this has created a critical mass of positive outputs for children.  My point is because there has been monopolistic approach, we won t know for sure what will work.  So there s no research out there.  Now, those things that we do know that work, as Sheila said, yes, we need to fund them, but the structures associated with public education and how they operate, many of those structures, not all, but many of them have been so antiquated and so unchanged over time that it s going to take some chipping away and some looking at other approaches that make sense and I do agree with you that I don t think the wealthy should take advantage of tax credits.  I m a firm believer in means-testing.  I think that that responds directly to the crisis of where we are because it s children who come from the most challenged backgrounds who are the ones that are leaving the charge, so to speak, with this dropout demographic.  And I understand, researchers really want to see where is the beef, but the problem is because we ve had one approach historically over time, there just aren t many models out there that we can empirically say will work with certainty, and again, I think the charter school examples are good because that was the same argument that was used to say we shouldn t even try that. Sheila Simmons:  Let me say one thing about charter schools.  In 1992, NEA opened six charter schools around the country because we wanted to look at the innovation and what did it really take to make a difference, what was the new way or new structure of governance, of staffing, but above all, instruction?  And one of the things that we learned was that innovation was good and we then continued it.  But what I wanted to say is that when you look a new structure, I do think that it is about studying and looking at what it is, and we did up front and right now.  And my colleague Susan Nunnan is, right now, working with all of our at least 15 affiliates -- we re looking to re-do that.  I mean, we stepped out there on faith with the notion that educators always, many times, know how to teach and the innovation side.  But let me tell you this.  What we did find out?  Running a school is very difficult.  Running a school is very difficult.  So even if you get people to come and you start up new schools, you have to have a whole different point of view and skills around administration, around management and of course, around teaching and learning. Frederick Hess:  I want to get a couple of questions on the table -- just get a couple of pretty short responses and then I want to open it up for Q&A.  First off, Kevin, in your introductory remarks, you made the point that some of the readings of statute in the constitutional provisions are what lawyers might call distinction without a difference in terms of the legality of tuition tax credits versus vouchers.  Now, you didn t say -- it sounded to me a bit like you actually think tuition tax credits might be more problematic than vouchers because you don t have the public oversight and the transparency that s associated with public expenditure.  But I want to give you the chance to clarify -- how do you think about that? Kevin Welner:  So there are the policy arguments in favor of one or the other and then there are also the legal arguments in favor of one or the other.  I was critiquing a legal argument; I was critiquing the 1999 Arizona Supreme Court decision that decided to disregard something called the Tax Expenditure Doctrine and to say that this mechanism somehow avoids a clear provision in the state constitution against public money going to private schools.  As a policy matter, I raised a couple of concerns about the wisdom of pursuing this mechanism rather than conventional vouchers if you were going to pursue one or the other.  By the way, I wouldn t vote for either one but sort of looking at the two as a policy analyst, I see some significant problems with the tax credit vouchers that I identified.  I should point out there are some, I think, also good policy arguments in favor of the tuition tax credit voucher mechanism as opposed to the conventional voucher mechanism.   I ll mention one.  If you re concerned about state finances, the bottom line for the state budget, there s an argument for creating a tax credit mechanism for less than 100 percent because then you re actually getting some donated money into the system.  So there are -- again, each law is different, each law has its own possible benefits and detriments -- but my overall bottom line concern about these things is sort of the opposite of what Adam is advocating.  With a lot of these things where we look to the market mechanism for solutions, there are some unintended consequences that can be pretty detrimental to the system that I haven t been able to get into today but which I think are my biggest concerns. Frederick Hess:  Well ,hopefully, we ll get a chance to talk about that more.  Adam, I would like to ask you a question. Kevin Chavous made the point that he d like to see means-testing on these programs.  Given that we ve established that there s a large variety of elements out there, are there particular elements that you have concerns about in some of these tuition tax credit laws or provisions that you think are particularly important? Adam Schaeffer:  The overall program credit cap I think is an important one, the earmarking.  I think you can structure a program that addresses equity concerns without artificial limitations on the size of the program which necessarily limits the number of people who can choose a school or an alternative form of education. Frederick Hess:  How do you feel about means-testing? Adam Schaeffer:  The means-testing -- I think there s a good argument for it not just from an equity standpoint, but from a free market standpoint -- that you don t want to necessarily subsidize education in a new system for extremely wealthy people.  Now just the middle class -- broadly speaking, that goes into a fairly high-income category -- they pay a lot of money in property taxes, and if they have a few kids, they also are going to have a hard time sending all their kids to private school, so I think the means-testing should extend pretty far up, but you know, right now we re subsidizing wealthy parents with public schools, so if we re not supposed to do that according to your perspective, I think we should start charging wealthy parents for public schools, too, because we re all subsidizing them currently.  So that would be my rhetoric to the whole means-testing issue. Frederick Hess:  Okay.  Why don t we go ahead and let s open this up for questions from the audience.  Joe McTighe:  Sure.  Joe McTighe from CAPE, which is Council for American Private Education.  I wanted to ask you about the tax expenditure doctrine, which is that tax credits and tax deductions are essentially the same as a direct government expenditure, and relate it to my own life.  In other words, I make a freewill contribution to a church, and I take a tax deduction for that.  It s the same as if the government were to support the church, making the church a recipient of government funds bringing down a host of regulations relating to recipients.  I don t know of any court or statute or government agency, for that matter, that holds that position.  I know you call it a doctrine, but who subscribes to that doctrine? Kevin Welner:  This was a mechanism that was devised in the late 1960 s to try to bring some common sense to the federal budget, which obviously didn t work very well, but the idea is that if you have a law that has the same effect on the budget as a direct expenditure through a deduction or through a credit, that it should be treated the same way for budgetary purposes.  Now, what you raise is an interesting, slippery-slope argument which is that if you think about itfrom an establishment clause perspective, if you think about it from the legal constitutional perspective about separation of church and state -- and clearly we ve had, for a century, the deduction for contributions made to religious institutions and that has not been challenged as a constitutional matter -- then why should it be treated differently when it is a 100 percent tax credit?  And that is, I think, an interesting legal question.  The answer obviously, if you re going to draw that distinction, is just one of degree. Adam Schaeffer:  I d like to add something on the tax expenditure issue.  It s a government budgetary perspective, not a taxpayer perspective, and so from the perspective of the government, there is no difference.  But from the practical reality of the taxpayer and then from a legal standpoint, as you detail in your book, there is a real important difference -- and that s the individual taxpayer s control over that.  The other thing about the religious institutions is not just religious institutions, it s nonprofits generally, so the same terms apply.  For education, you couldn t just pass a tax credit program for religious schools; it has to be for any educational institution. Frederick Hess:  Erik. Erik Robelen:  Erik Robelen with Education Week.  Kevin Welner, I m wondering if you can say a little bit more about maybe picking one of the programs -- given I know you have misgivings about the approach in general -- but which one would you say you find sort of most promising and most along the lines of what you would envision for this sort of program to be effective?  And talk just a little bit more -- it seems like one of the really important things here is the distinctions between these, so maybe you could sort of dig down a little deeper in one of them.  I m guessing you might say that some of parts of the Florida program work and just say a little bit about how it works and what it is about that that might be more effective than some of the others? Kevin Welner:  Really quickly, huh?  Let s see.  I think that the issues that I ve raised during this brief talk all seem in favor of Florida s law.  What happened in Florida is the law was originally passed in 2001.  It was revised a couple of years ago because there were a lot of instances of fraud and things similar to fraud with money disappearing and schools that didn t really have kids and things like that.  And so they brought in a lot of oversight into the revision but they also brought in some issues that I think are important in terms of data collecting, data reporting, and evaluation.  And so David Figlio at University of Florida has been contracted to do an evaluation of it and he has a good design, and I hope that, not withstanding some weaknesses in the data he ll be getting, that he ll be able to give us some information about the effects of the law.  Frederick Hess:  Kevin, take a minute. -- do you want to catalog a couple of the key elements, if there re two or three or five pieces of the Florida law that make it a good law from your perspective? Kevin Welner:  Well, I m not fully endorsing the Florida Law. Frederick Hess:  Sure.  I understand your concern. Kevin Welner:  I think, for example, Iowa s law is the one that has 65 percent tax credit which I would consider preferable to the Florida 100 percent tax credit.  And I also draw on legislation in the book that was introduced but not passed in Colorado which I think had some better elements to it.  And I know I m not giving you a lot of very specific responses.  The things that I think are most important are dealing with oversight, dealing with data reporting, dealing with evaluation, dealing with serving at-risk kids, finding ways to try to bring more money into the system.  Those are the sorts of things that I think are most important. Frederick Hess:  When you say dealing with, you mean it simply has provisions for it or there s particular provisions that you think make more sense? Kevin Welner:  Well, yes.  I think that particular provisions certainly would make -- this is difficult to spell out because these are very, very minute details between one law and another but the main sorts of things that are required in order to get an answer, for example, to the accountability question would be requiring the students to take nationally normed tests.  In Florida, they allow these students to take either the FCAT or one of the approved nationally normed test which gives the David Figlio, the evaluator, a chance to try to draw some conclusions based on the growth of students in the different systems. Frederick Hess:  Okay.  Yes, sir? Male Voice:  From the U.S. Department of Education.  Kevin, I have a question for you about the tax expenditure doctrine. Kevin Welner:  Who would ve thought that would be the most interesting part of the talk? Male Voice:  It s interesting because of a number of ramifications, but are you familiar with the Mueller versus Allen Supreme Court decision that did that not uphold the constitutionality of these kinds of tax expenditures, as you would call them, for parents own educational expenses for their own children? Kevin Welner:  Yes.  So there are two types of tuition tax credits.  One is the Mueller versus Allen type which came up to the Supreme Court, which is if I spend money on my own child, I could take a tax credit against those expenses.  And then, what we re talking about here which is this mechanism to sort of create a voucher through donations.  Now, the tax expenditure doctrine didn t come up in the Mueller versus Allen case.  The court has dealt very briefly with the tax expenditure doctrine in a couple of different contexts.  So it has a little bit of Supreme Court approval but the Mueller versus Allen case didn t deal with that. Frederick Hess:  Yes, sir? Jeff Goodman:  Jeff Goodman, Alliance for School Choice.  I have a question for Kevin also and that s in terms of -- you said we need to prove that these programs work and I m wondering what you would define as working?   Does it have to perform better than the public system by a certain amount?  Because we know like in public school, if the school A doesn t do better then school B, that it doesn t get shut down.  Does there just has to be a certain standard -- so is it a cut score?  Does the school have to raise kids achievement by a certain amount?  We know when a kid graduates from high school that that worked for that kid if they have the tools they need to succeed.  What s your broader definition of working? Kevin Welner:  I think each one of us has to have our own definition, but the point I m trying to make is that we need to have the empirical evidence so each one of us can make that judgment.  This charter school article in the Washington Post, which I haven t seen, sounds like it might have.  I don t know what it was reporting on; I assume there was a good study done with good data collected, and that is what I m asking for in this situation.  If we re going to pursue an innovative reform, we need to collect the data, we need to analyze the data, and then whoever the policymakers are in making the decision about expansion or shutting down of a program, need to be able to look at those results.  The charter school studies that I had seen to date -- again, I haven t read the Washington Post article today -- are all over the board in terms of what the effects of charter schools are on student outcomes that are important to us.  But each individual that I know who either likes or dislikes charter schools, comes to it from a slightly different angle in terms of what they value, and virtually everyone values student outcomes in terms of graduation and life chances and things like that.  But a lot of other people will look at, for example, the voucher studies and say, look, the parents are all satisfied.  That s the one consistent finding from the existing voucher studies -- that the parents participating are all satisfied.   And for some people that s enough, and if I m a policymaker who cares most about that, then I m going to want to expand the vouchers based only on that data, even if the other results aren t showing very positive results.  So I guess the answer is& for me, it s going to be different than for you.  For each policymaker it s going to be different, but what we need to do is to collect the data and analyze them and then have the results in front of us so we could make a research-based decision about what works. Frederick Hess:  Kevin Chavous, what is your take on this?  You suggested that in these communities where it s clear the status quo isn t getting us anywhere close to where we need to be, that we need to be comfortable trying a lot of options.  How do we tell if these options are working?  How do you approach that question? Kevin Chavous:  Well, I do think that, as Kevin said, the idea of parental satisfaction is important.  Every charter school that I know about -- nearly all of them have significant waiting lists and I think there s something to that, especially when we know that there re schools that people are trying to run to get their kids out of and they engage in surreptitious behavior, using other addresses and the like, because they re trying to get out of these schools.  I think that at the end of the day, we ve got to look a lot of factors.  I think graduation rates are important.  But there s another thing that s also more important that isn t spoken about enough and I think that s kids that actually not just graduate from high school but enroll in college.  And studies have shown that a large percentage of, for instance, African American, Hispanic kids who graduate from high school at grade level still don t go to college because they either don t have access, because the schools they went to didn t have their career counseling.  So I like the idea of like, for instance, Kevin Johnson started the charter school in Sacramento where 81 percent of those kids go to college even though his test scores aren t as great as some of these other charter schools.  To me that s an important thing.  So I think that Kevin makes a great point, that what may be helpful is to lay all these lists of factors out here that have importance to some folks and then figure out the best way to quantify those various criteria.  From my point of view, it s clear.  I look at high school graduation rates because if you ve got 80 percent of the kids dropping out of high school, we know that chances are they re not going to be productive members of society.  So I do think that that to me is sort of a baseline determining factor which you look at.  These kids have to graduate from high school, presumably graduate at that level and have the capacity to know that they have the requisite knowledge that works in terms of graduation, not social promotion, and I think to me that s the beginning point.  Now I think it s important to look at some of these other factors as well. Sheila Simmons:  I d like to also add that there are three ways I think that you can look at this issue of evidence.  One is performance, the second is access, and the third is attainment.  And I believe if you look at each of these three you were talking about, knowing where the student is, so when you re looking at what s working, you can ask what impact does it have on student performance?  When you look at the different programs, what impact does it have on access because access is& Remember early on, I spoke about having access to gifted and talented programs, AP programs and access to other resources, i.e., textbooks, computers?  That too has a lot to do with what resources those particular programs provide.  And thirdly, I would definitely agree with Kevin on the issue of attainment.  If we don t graduate the students, we then have all failed in what it is that we re supposed to be doing.  So I would say, look at those three areas. Michelle Doyle:  Hi, I m Michelle Doyle and I m an independent consultant.  I d just like to back up a little bit from the discussion we ve had and to go back to what Kevin Chavous said as he opened this as I want to look at kids for a minute.  If I were a poor parent right now and I had a kindergartener starting school, I don t think that I would be very comforted to know that the goal of the school system is to improve by 2020.  On a policy end, I think that s great and we all want to support public schools, but what are we going to do for our kids in the meantime who are going to go all the way through K-12 before there s any achievement in that proficiency or advanced level? Sheila Simmons:  When I said 2020, I was talking about, as you said, policy.  But remember, I also talked about practice; what it is that we can do right now in the classroom?  My analogy is when your house is burning, you don t care who s bringing the water, but the issue is that you want something to happen.  And so when you say look at what s going to happen not in 2020 but today, that s the reason I went back to the issue of eliminating the achievement gaps.  And let me just say this issue about the achievement gaps -- if I were, and I have been in this situation, poor and needed to make sure that I was able to get through school, this was something that meant a lot&   What was happening in the classroom in terms of the types of resources that I had, the types of accountability, but also what was my responsibility and my parents responsibility?  So again, it s not just looking at 2020.  Yes, that s a vision, but we have to look at what s happening in the classroom today and this issue of the gaps is very important. Kevin Chavous:  Well, you know, Rick Hess and I have a mutual friend, Howard Fuller, and he uses the Harriet Tubman expression.  Harriet Tubman, while they were dealing with slavery, she said she understood that the president, President Lincoln, and Frederick Douglas were working to end slavery.  But in the meantime, she wanted to take one slave up North at a time, as many she can get her hands on.  And I think that s where we are.  With these deficits -- all those analogies work.  You ve got to fly the plane while you fix it, you ve got to put the water on the fire, all that stuff, but you know what?  We re not actualizing that.  We still tell parents, low-income parents from certain neighborhoods, you must send your child to this school.   It doesn t matter if the school has been through all kind of reconstitution efforts, reformation efforts, and we still know that the outputs are only five percent proficiency -- like in an elementary school in Hartford, and they can t close it -- ten percent proficiency, and we still tell parents you must send your child to that school.   You see, that s why I think all these other choice options make sense.  That s why I like them to be means-tested.  I d like to deal with these in situations where you know you re dooming a parent to have his child fail before they get a chance. And I ll end with one final example.  I ll never forget when we were in the midst of a major superintendent search here in D.C. and this low-income woman from public housing in southeast Washington testified for the committee and she said, You know, councilman, I know you and the mayor are working in finding a new superintendent and I heard him on TV.  He sounds good, but he s talking about a three to five year plan.  My son is in seventh grade.  Three to five years means he won t make it.  And you know what?  The last superintendent -- he started three to five year plan when my oldest son was in seventh grade and the school wasn t fixed.   So at the end of the day, we re talking about real parents who have real children with real educational needs, who want to what s best for their child and yet, we should not put the reformation of our public school system on their backs.  And I think that s what we too often are quick to say.  That you know, trust us, give us time.  It may not work for your child, it may not work for your youngest child but maybe your child s child will have it.  And see, I don t think we have -- and I go back to that TARP legislation.  We need to have the same, ready dispatch to make sure that we provide the right options for those kids as we have to fix this banking situation.  And I think you re right.  What are we going to do about these children?  We are creating an environment where children, other citizens will end up -- and there s no other way to put -- predators and who will prey on us.  And I say that us collectively, not indiscriminately.  I think that it is very, very important for us to realize the consequences of having a permanent underclass being put out there because we re not educating kids, and I feel very strongly about that.  So for me, I understand the policy arguments but the policy arguments have to be lodged in the context of today s reality.  If our schools aren t working for all kids, then we have to have an open mind to look at other ways to educate these kids. Frederick Hess:  Okay.  Kevin. Kevin Welner:  I couldn t agree more with the diagnosis of the problem.  I think that was very eloquently stated and I wish I could be as eloquent in stating the problem.  I just don t see how we go from that state of the problem to jump to unproven solutions and that s what I keep coming back to and I don t want to -- we don t probably have a lot of time left and I m probably going to throw a monkey wrench into the middle of this conversation by saying a bunch of controversial things right at the end.  But I think -- let me try to draw some distinctions about why I don t see vouchers and neovouchers as solution to the problems that we ve just articulated.  And most clearly, even if I am that parent, even if I am that activist parents who s actively looking for a solution for my own child and I get a voucher and I use it, the results thus far are showing that I m not going to get a significant benefit.  Now, I might be one of the lucky individuals who does, but I also might be one of the unlucky individuals who has a worse experience with my child in the private school.  So overall, we re just not seeing the pay-off that we re hoping to see from that result.  But there s a more controversial answer to that question and that requires us to step back and not think of ourselves as the parents because my guess is most of the people in this room are those active parents who are going to be looking for the solutions for our child.  The truth is, the vast majority of kids, particularly the kids who are not doing well educationally, don t have the same efficacious parents that we in this room might hope to be and the truth is that the best predictor of how well someone is going to do academically, the best predictor of academic outcomes is the education of that child s parents.  We know that.  And so what also is that correlated with?  What also is the education of child s parents correlated with?  Well, it s correlated with the activeness of that parent in choosing a school for his or her kids.  And so the Harriet-Tubman analogy, I think, is particularly telling because the reality is that if we throw the life vest to those parents who were efficacious enough and that works and we actually do start to see a payoff for the kids getting the vouchers, we still are left with the situation that the kids who were worse off before, the kids with the least advantages before are now left in a school system that has had certain resources taken away from them.  And so we see a cycling downward of the -- at least the big risk is we see a cycling downward of the public schools that are still serving the vast majority of the kids. Frederick Hess:  I m going to give Adam the last word in this last round and then we re going to actually have to cut. Adam Schaeffer:  That last argument really makes me sick to my stomach, actually, when I hear people argue it because what you re saying is that because we can t save everyone and because some kids unfortunately are in hopeless family situations or environments, then we shouldn t allow other kids to get out of that situation because they have slightly more motivated parents.  The lower the bar we can set to have parents be able to get their kid into a better environment, even if it s just marginal, even if it s just a slightly different cultural environment that they think is better that doesn t do anything educationally, we should do everything we can to let those parents take advantage of those options instead of making it as difficult as possible for them to get their kids into good schools.    [End of Transcript]</body></html>