TABLE OF CONTENTS *

OPENING STATEMENT OF THE HONORABLE FRANK D. RIGGS, CHAIRMAN, SUBCOMMITTEE ON EARLY CHILDHOOD, YOUTH AND FAMILIES, COMMITTEE ON EDUCATION AND THE WORKFORCE *

OPENING STATEMENT OF THE HONORABLE MATTHEW G. MARTINEZ, A CONGRESSMAN FROM THE STATE OF CALIFORNIA *

OPENING STATEMENT OF THE HONORABLE TIM ROEMER, CONGRESSMAN FROM THE STATE OF INDIANNA *

OPENING STATEMENT OF THE HONORABLE GEORGE MILLER, CONGRESSMAN FROM THE STATE OF CALIFORNIA *

STATEMENT OF CORNELIA BLANCHETTE, ASSOCIATE DIRECTOR FOR EDUCATION AND EMPLOYMENT ISSUES, GENERAL ACCOUNTING OFFICE *

STATEMENT OF ROBERT CHASE, PRESIDENT, NATIONAL EDUCATION ASSOCIATION *

STATEMENT OF JEANNE ALLEN, PRESIDENT, THE CENTER FOR EDUCATION REFORM *

STATEMENT OF DR. YVONNE CHAN, PRINCIPAL, VAUGHN NEXT CENTURY LEARNING CENTER, SAN FERNANDO, CALIFORNIA *

STATEMENT OF RICHARD THOMPSON, PRESIDENT, CHARTER SCHOOLS DEVELOPMENT CORPORATION *

STATEMENT OF SHARON JOHNSON-LEWIS, DIRECTOR OF RESEARCH FOR THE COUNCIL OF THE GREAT CITY SCHOOLS *

APPENDIX A – FREE PRESS ARTICLE "CHARTERS EARN LOW SCORES ON MEAP"; EDUCATION DAILY ARTICLE "ED FINDS DISABILITY BIAS AT BOSTON CHARTER SCHOOL"; AND TENNESSEE EDUCATION ASSOCIATION NEWS ARTILCE "ED-VENTURISTS AIM TO TOPPLE PUBLIC SCHOOL MONOPOLY WITH NEW EDUCATION INDUSTRY" *

House of Representatives

Subcommittee on Early Childhood, Youth and Families

Committee on Education and the Workforce

The Subcommittee met, pursuant to call, at 10:04 a.m. in Room 2175, Rayburn House Office Building, Honorable Frank Riggs [Chairman of the Subcommittee] presiding.

Present: Representatives Riggs, Castle, Johnson, Martinez, Miller, Kildee, Owens, Payne, Mink, Roemer, Scott, and Kucinich.

Staff Present: Vic Klatt, Education Policy Coordinator; Sally Lovejoy, Senior Education Policy Advisor; Jo-Marie St. Martin, General Counsel; Kent Talbert, Professional Staff; Denzel McGuire, Professional Staff; Richard Stombres, Legislative Assistant; June L. Harris, Education Coordinator; Margo Huber, Staff Assistant; and Alex Nock, Legislative Assistant.

Chairman Riggs. Good morning. I call to order this hearing on Charter Schools by the Subcommittee on Early Childhood, Youth and Families. I want to take this opportunity to welcome each of you to our fifth hearing this year dealing with charter schools and public school choice and creating more choice in order to empower parents to choose the education that is best suited and most appropriate for their child.

In January of this year we had a Charter School field hearing in San Fernando, California two field hearings in San Fernando, California, on the campus of the Vaughn Learning Center and I see Dr. Chan here today and we are delighted to have her, and, in Phoenix, Arizona, and I think most people recognize has been on the cutting edge of charter school reform. In April and June of this year we also held hearings here in Washington. Dr. Chan, one of the leading charter school educators in the country, testified at our California hearing and she will appear on Panel II today. In part, as a result of Dr. Chan's California testimony and testimony of other witnesses and research, I became aware that some charter schools may not be receiving a fair share and equitable share of Federal education funding for K-12 categorical programs.

As a result, I along with Representative Roemer, Chairman Goodling and Senators Jeffords, Coats and Lieberman requested that the General Accounting Office conduct a survey of how Title I IDEA, or special education, Eisenhower Vocational Education and other Federal aid is being allocated within States and school districts to public charter schools. Today we will hear the preliminary results of that survey from our first panel of witnesses.

I am pleased that we have Ms. Cornelia Blanchette, Associate Director for Education and Employment Issues appearing on behalf of the GAO. The GAO has rendered very important and helpful assistance to me and the Subcommittee staff and I want to thank them publicly for their fine work. I look forward to their more formal blue book report, which I understand will be forthcoming in a few months, which will supplement also the ongoing study of charter schools being conducted by the Department of Education. I am also pleased that we will hear today from Ms. Jeanne Allen, a long time leader in the education reform movement and president of the Center for Education Reform, an organization which provides information and assistance to citizens and educators across the country interested in what is happening in charter schools.

In addition, we have with us the president of the National Education Association, Mr. Robert Chase, who will discuss the NEA's recent involvement in starting charter schools. I want to also welcome Mr. Richard Thompson, the president of the Charter Schools Development Corporation. The CSDC is a recently formed group of business, political and education leaders dedicated to improving K-12 public education, through providing financial, administrative and technical support to charter schools or public choice schools. CSDC is committed to the highest standards for charter schools. Finally, but certainly not least, we will hear from Ms. Sharon Johnson-Lewis. Ms. Johnson-Lewis is the Director of Research for the Great City Schools Organization, representing some of America's largest urban school districts and she will share with us their views on charter schools and the public school choice.

Before we hear from our witnesses, I would like to briefly offer three comments. First, several days ago, actually last week, I was very pleased to join with Representative Roemer on the House Floor in co-sponsoring his successful amendment to increase Federal funding for charter schools to the full $100 million level that the President has requested in his budget proposal to Congress. I am told that the Senate has a similar amendment. Based upon recent studies at the Department of Education and others, I believe that this additional funding, the President's, again, full budget request of 100 million in Federal taxpayer funding for the start up of additional charter schools is a wise investment. The second comment I would offer is that the charter movement is continuing to spread. We now have 29 States with charter laws, along with the District of Columbia and the Commonwealth of Puerto Rico. And, I believe we are now at or above 500 charter schools currently in operation across the country and even though that is what the staff wrote, I think the number is more in the neighborhood of 600 to 700 charter schools actually in existence today.

My final comment is that charter schools have served as a catalyst for positive changes in public education. Academic and financial accountability, the cutting of red tape, promoting innovation, small student to teacher ratios, more dollars to the classroom, and increased parental involvement have all come the center stage, in large part due to the attention public charter schools have brought to these matters. I believe charter schools will continue to stimulate positive changes in public education which will ultimately and most importantly, to the benefit of students. I look forward to hearing from our two distinguished Panels and at this time I recognize my good friend, the distinguished ranking Member of the Subcommittee, Representative Martinez, for any opening comments he would like to make.

Mr. Martinez. Thank you, Mr. Chairman, and I want to join you in welcoming the witnesses who are coming before us today. I know we are both looking forward to their testimony.

You know, as you said in your opening statement, that charter schools seemed to be a growing phenomena in this country, I think just because things grow rapidly and spread rapidly, they are not necessarily always good. I am thinking of a couple of diseases that have been horrendous to our population that are not, well, but they spread rapidly, too.

That is not to liken this phenomenon to those kinds of things, but, the fact is, I can remember back in history and I imagine when public school systems first developed and started to develop throughout the country that there was this same great enthusiasm for the fact that our children were going to be educated.

The fact is, is that public schools have met a critical mass in the number of people that they are required to educate and the, sufficient funds in which they are required to do this job would. And, the fact is that there are a lot of problems in public schools but I look around and as I asked them at caucus the other day, "How many people were products of private schools?" and about five percent raised their hands. I asked, "How many are product of public schools?" and 95 percent raised their hands which led me to believe, you know, if all these intelligent, intellectual people are here in Congress, how did they get here if the public school system is so bad? Now, that is not to say that I do not recognize there are problems with these public schools; there are. And, I am encouraged by the fact that there are several Congressmen who raised themselves on the Floor to join, to ensure that the House Labor and Health and Human Services appropriation bill included the President's funding request, as you just mentioned.

Even all our Presidents are not right all the time, but, we have seen this large increase across the nation of established private schools and almost a doubling of the number in the past year, and I say that strictly out of frustration from the fact that some people feel that their children are not being educated. But, the fact is, the choice has always been there for those people that are more affluent or those people that are more aggressive or those people that are more concerned about their children's education.

The fact is that I had choices, as I said in a previous hearing. I sent my kids to a private school for the first K through 6, gave them their choice as they moved on into the higher grades and all but one chose public schools and one chose the private school and was educated through 12 there and then onto a couple of years of college at that same school. But, the fact is that that choice was there for me, but I was a more affluent parent. I was a more aggressive parent. I was a parent who cared about my child's education.

What I am worried about is all the kids that we are leaving behind in all those other public schools and we are not going to address the problems there because we have found the panacea to get education, the charter school. I have nothing against any education system that provides better education for our children, but I do have a real problem with being selective in who we educate and how well we educate them.

If I remember right, the Constitution says we are all equal and if we are all equal, we are all entitled to the same things. If we are all entitled to the same things, we are all entitled to quality education. The growing enthusiasm for the charter school is fine and I am always encouraged by people who attempt to engage themselves in efforts to deal with the problems of our educational system; however, I caution these supporters of charter schools which, even today remain largely an untested and unproved reform tool, we continue to have serious problems with charter schools. In fact, I would ask unanimous consent to introduce several articles in the record which show that there are serious problems in some of our Nation's charter schools relating to the serving of individuals with disabilities and the use of charter schools as a profit making enterprise and that is one thing our public schools have never been, and these are supposedly public schools, profit making enterprises.

Mr. Martinez. Some of these charter schools in the market today are enabling their students to achieve high educational outcomes envisioned by many of the charter advocates but there are still others which are in vast need of improvement. I can see all the same organizations voting to support charter schools, the same organizations that support a very worthy program and a very prudent program, Head Start, but you get these national organizations now that find a way to make money off of it, too.

I would like to remind the Chairman, who I know is strongly supportive of the charter school, that in our efforts to highlight and expand upon this educational philosophy we must be careful to ensure that charter schools live up to what they truly are, public schools. The American tradition of educational opportunity must be for all, and I emphasize for all and it must be maintained for all in any type of legislation that we pass out of this Congress. We cannot and should not forget that the vast majority of our students remain in our traditional public school systems and I asked the question in a previous hearing, "Will charter schools replace public schools?" The answer from everyone was an emphatic no. If that is the case, we are still left with the problems of the public school and that is where we should be concentrating our efforts.

I want to thank the Chairman for calling the hearing, however. I hope that it is enlightening to all of us. Thank you.

Chairman Riggs. I thank the gentleman. At this point in time, is there any other Member seeking recognition for the purpose of making opening statement? Mr. Roemer?

Mr. Roemer. Since, Mr. Chairman, I signed the request for asking the GAO to look into any kinds of problems with initial funding for charter schools, I just want to make a very brief opening statement.

First of all, I am delighted to have the General Accounting Office here. I am very impressed with your product and very impressed with your research so I look forward to your findings and your help and your analyses this morning.

Secondly, I want to thank the Chairman for calling yet another hearing on charter schools and for his help last week on my amendment to increase funding for charter schools by $25 million. I think there is a lot of support for charter schools, not only from the President of the United States, not only from the Department of Education, but from the Democratic side of the aisle.

When I requested to go into some of our public schools throughout the nation, particularly in some of our bigger cities, Superintendents have told me, "I cannot ensure your safety, Congressman. You cannot go into that school." Now, how would I feel as a parent, sending a school child into a school where they cannot guarantee my safety?

Too many public schools are not working well. We have a host of public schools that are doing a phenomenally good job, a host of teachers that are turning lives around for people. Charter schools are a way of investing in the public education system. I want to be very firm about that. I am a product of public and private schools. I am a firm supporter of public education in America and I want to be on record saying I do not want to give up on one child or one public school.

This is a way, not a panacea, this is a way, small efforts to help improve our public schools by creating cradles of intervention and invention, by creating a less bureaucracy and paperwork, by providing more choice to our public school teachers and parents and school children and doing a host of other things that we need to do to reform the schools which I will not get into today. But, I was very impressed by the large number of democrats who came to the Floor last week to speak in favor of the amendment that understands where charter schools are going and I want to underscore the point, too, that if a charter school is not working, one of the benefits is we can close it down. We should be able to close down some public schools that are not working very well. So, I think that this is an idea we are trying because it invests in our public schools and it does not give up on them.

And, then it says that public education serves so many important purposes in this country today. In addition to providing a free education, it provides a lot of other benefits to all Americans that are very, very critical as we move into this new millennium. So, let us continue to try to improve and challenge our public schools.

I would be happy to yield to the gentleman.

Mr. Miller. I want to thank the gentleman, both for his amendment last week and also for his remarks this morning because I think you are saying something that is important here, that this is really about the public school system.

My sense of the charter school movement was that it was really an opportunity for sort of a two way street, that we could allow groups or organizations or parts of school districts to break off and to try and experiment with some approaches to education that were too cumbersome under the existing system that might provide some opportunities.

But, that those parts of various LEA's that were not part of the charter school would also have an opportunity to learn from the successes and the failures of those charter schools, that these were, at best, a laboratory. Whether or not they become a permanent fixture of the American public school landscape or not is yet to be determined. We are not there yet.

But, before we start creating a huge amount of animosity, we ought to think about what we can how we can utilize this model and as they proliferate, how we can learn from the successes and learn from the failures. They will not all be successful. That was never part of the proposition that we were going to have 100 percent success, but this can be an opportunity for the public system to seek some experimentation and some avenues to improve success and opportunities for success and I think that this report that we are going to hear from this morning is helpful in us learning how Federal funds flow and what barriers that may or may not exist, whether at the State or Federal level.

And, again, that is all part of the model that we may learn from this experiment, too, in terms of some of the conditions that we put on Federal funds.

I just want to thank you for your statement that this is, in fact, continues to be a part of the public school system.

Mr. Roemer. I thank the gentleman from California for his strong support of both the amendment last week and also his openness to the hearing today.

We are joined by Mr. Owens from New York and I want to thank him for his strong statement last week as well, too. And, I just want to conclude by saying that we are still learning about charter schools. We are still trying to find out through preliminary analyses, from the Hudson Institute, from the Department of Education that have done some preliminary analysis. But, for the most part, charter schools do address special needs students and minority students and students that are eligible for school lunch, free school lunches, at the same level that the public schools do.

Now, some States do a better job than others do, but we work here to learn more and see where we can continue to improve the charter school movement and I thank the Chairman for recognizing me.

Chairman Riggs. I thank the gentleman for his opening comments.

Without further adieu, I would like to go to our first witness who I mentioned briefly in my introductory remarks. Ms. Cornelia Blanchette is the Associate Director for Education and Employment Issues at the General Accounting Office, GAO, as it is better known. She will testify in the ongoing GAO study of the allocation of Federal categorical grant dollars to charter schools. Although the study will not be completed until April of next year, the GAO will be able to provide detailed testimony on the preliminary results of their study.

And I am told, Ms. Blanchette, that you are joined here at the table by Jeff Appel and by Harriet Ganson, and we are very pleased to have all three of you here this morning. Thank you for your time and we look forward to your testimony and you may now proceed.

Ms. Blanchette. Mr. Chairman and Members of the Subcommittee, we are pleased to be here to discuss charter schools' ability to access Federal funding. We will discuss, first, how funds are distributed to charter schools under the two largest Federal elementary and secondary school programs, those authorized by Title I of the Elementary and Secondary Education Act and the Individuals with Disabilities Education Act. Secondly, the opinions of charter school operators, on whether the distribution is equitable. And, thirdly, factors that appear to be impeding and those that appear to be facilitating charter schools in accessing these funds.

Our discussion is based on preliminary results of the ongoing study of these issues that we are doing at your request. We are conducting case studies in seven States that accounted for 91 percent of the charter schools operating during the 1996-97 school year, and a telephone survey of a representative sample of charter schools located in these States. We have completed about 30 of 50 planned telephone surveys. Under Title I, the Federal government awards grants to local education agencies through State education agencies.

Federal statutory and regulatory guidelines require LEA's to meet minimum thresholds in order to be eligible for Title I funds. An LEA that receives Title I funds and has more than one school within its district has some discretion in allocating these funds to individual schools. The LEA must rank its schools according to the proportion of children that come from low-income families enrolled in each school. LEA's must allocate Title I funds or provide Title 1 services, first to schools that have more than 75 percent of their students coming from low income families. After providing funds for services to these schools, LEA's have the option of serving schools that do not meet the 75 percent criterion with remaining funds. Under IDEA, annually, the Department of Education allocates funds to eligible States on the basis of their reported numbers of children receiving special education and related services during the preceding fiscal year, the national average per pupil expenditure and the amount appropriated by the Congress for the program.

States, in turn, use their own formulas to allocate funds. In general, Title I funds and IDEA funds or services are allocated to charter schools on the basis of whether they are treated as independent LEA's, the independent model, or as dependents of LEA's, the dependent model. Because of different eligibility requirements some charter schools that would have received funds under the independent model may not receive such funds under the dependent model. Two-thirds of the charter school operators we surveyed, who told us they applied for Title I funds for the 1996-97 school year, reported receiving funds. And, four-fifths of those that told us they applied for IDEA funds reported receiving funds or IDEA related services. A majority of charter school operators expressing an opinion during our telephone survey believe their schools received an equitable share of both Title I and IDEA funding. Our survey has identified a variety of barriers that charter school operators believed made it difficult for them to apply for and receive Title I and IDEA funds.

With respect to Title I funding, these barriers included no prior years enrollment or student eligibility data, growth patterns such that the prior years enrollment is not reflective of the current enrollment, difficulty obtaining eligibility data, difficulty establishing eligibility, receiving charter school status after the deadline for State allocation of funds, lack of State of district funding allocation policies and procedures for charter schools and operating under the dependent funding model. With respect to IDEA funding, a charter school technical assistance provider we visited cited philosophical differences with IDEA requirements as a barrier for some charter schools. Some of our survey respondents cited the application process and the cost and time involved in applying for funds and complying with monitoring the reporting requirements as barriers.

Charter school operators reported that outreach and technical assistance were key factors that facilitated their ability to access Federal funds. Other factors cited a school official, included the use of consolidated program applications, the use of computerized application forms and processes and the ability to rely on sponsoring district offices for grant administration. In conclusion, on the basis of our preliminary work, charter schools do not appear to be at a disadvantage in terms of how Federal funds are allocated. However, charter schools do face some barriers in accessing Federal funds. Despite these barriers, most of the charter school operators who expressed an opinion in our survey believe the Title I and IDEA funds are equitably allocated to their schools.

This concludes my statement, Mr. Chairman. I would be happy to answer any questions you or Members of the Subcommittee have.

Chairman Riggs. Thank you, Ms. Blanchette, for your very succinct testimony and, let me ask whether either Ms. Ganson or Mr. Appel would like to comment to supplement your remarks.

Ms. Ganson. Not at this time.

Chairman Riggs. Okay. But, you are available, obviously, to respond to questions? Let me ask, first of all, in your study, what sort of methodology you used to determine if the operators of charter schools, the administrators of charter schools were aware that they were entitled to a fair or equitable of the, you know, per capita student funding from Federal categorical funds?

Ms. Blanchette. Well, of course, our survey results are self reported and one of the things that we were told in some instances for was that the charter school operators were not aware that they were eligible to receive funds or if they were eligible and if they indeed received funds, whether or not they had received the right amount. They were not familiar with the formulas enough to be able to determine whether or not they had an equitable share. And, some, feeling that way, or knowing that, put faith in the system and the formulas and thought that certainly they must be treated equitably because there are formulas and arbitrary allocation is not allowed. Others declined to respond to that particular question because they really did not know.

Chairman Riggs. How large was your sampling? If we have 29 States, the District of Columbia and Puerto Rico with charter school laws on the books and approximately 700 schools, charters schools, operating or, you know, open for business this fall, how large was your sampling?

Ms. Blanchette. Well, we focused on seven States and for the 96-97 school year, those seven States had 91 percent of the charter schools, the number of charter schools then in operation. Within those States, we are actually surveying we were surveying, by the time we finish, 50 schools. We have completed our survey of 32 of those schools.

Chairman Riggs. So, your survey ultimately will include roughly 50 schools, you said?

Ms. Blanchette. That is correct.

Chairman Riggs. Out of 700 nationwide?

Ms. Blanchette. Well, 500 –

Chairman Riggs. 500.

Ms. Blanchette. I believe, as of the 96-97 school year.

Chairman Riggs. All right. So, roughly 10 percent of the charter schools in existence during the 96-97 school year?

Ms. Blanchette. That is correct.

Chairman Riggs. Thank you.

Ms. Blanchette. That focused in the seven States. So, we really cannot we want to be careful to explain that we cannot say anything well, at this point we cannot say anything beyond the 32 we have talked to.

Chairman Riggs. Right.

Ms. Blanchette. But, ultimately, we will not be able to say anything for the nine percent of charter schools that are in States not covered by our survey.

Chairman Riggs. I understand that. Now, you testified that whether a charter school is treated as a LEA, a local education agency, or as a dependent of an LEA. That is not a good term, but –

Ms. Blanchette. As a school within a school district.

Chairman Riggs. School within a school district or whether they have let me rephrase that. You testified that whether a charter school is recognized as its own school district.

Ms. Blanchette. That is correct.

Chairman Riggs. Or, as a school within a school district –

Ms. Blanchette. Correct.

Chairman Riggs. –is an important consideration. Can you elaborate on why that is important?

Ms. Blanchette. Yes. The eligibility requirements to get a basic Title I grant is that a school district have at least 10 low income students and that those 10 students comprise at least two percent of the district school age population. So, if a school, charter school, is treated as an LEA and meets that requirement, its eligible for funds. When funds are allocated to eligible LEA's, the LEA in turn allocates to the schools within the district. But, there is no requirement that an allocation go to each school. Schools are ranked and depending where the charter school falls in the ranking, it may or may not receive funds.

Chairman Riggs. Now, I think that is pretty important. And, again, I just want to get at this perception, because that is what it is, it is a perception. Your sampling, your survey, was based on the opinion –

Ms. Blanchette. That is correct.

Chairman Riggs. –that charter schools operators had that they were being treated fairly.

Ms. Blanchette. That is correct.

Chairman Riggs. Treated like all other local schools.

Ms. Blanchette. Or, other schools in their comparable situation.

Chairman Riggs. Other schools in that community, in that local community. Did you find that most charter schools have the administrative expertise to comply with all the deadlines and administrative requirements that jump through all the regulatory hoops that we impose as a condition of access to Federal dollars?

Ms. Blanchette. They told us, many of them told us that they do not. We did not do any separate assessment of the capabilities of the schools. But, the operators told us that, among the things that were deterrents to them in getting funds was the time, the resources to understand the process and implement the process and in some cases, to even know they are eligible for funds.

Chairman Riggs. And, that that sort of goes against the very philosophy of charter schools which is one of decentralization and deregulation. That is to say, if they want to become eligible, if they want to receive Federal funding, they have to have a certain amount of administrative expertise and they obviously have to require with all the rules and regulations that we impose on them as a condition –

Ms. Blanchette. That is right.

Chairman Riggs. of Federal taxpayer funding for the various Federal categorical education programs. I believe, later on, we will hear from a witness who claims that charter schools, treated as a, as a separate LEA or treated as a separate school district will lead to Federal funds being diverted from high poverty traditional schools to lower poverty charter schools. Did you find that to be the case in your survey?

Ms. Blanchette. Well, it would be speculative on my part to say that that would be so. If you consider how funds are allocated, however, the reason that some schools currently, whether they are charter schools or just regular public schools, do not receive funds, is because they have lower concentrations of children from high poverty families. If a charter school is treated as an LEA and it meets the 10 student, two-percent requirement, it will get some funds. Now, to an extent that school would not have gotten funds had it been in the ranking and been part of a district, then the funds will be diverted from you know, from some other schools.

Chairman Riggs. I believe we may hear testimony later today that in some instances, Federal funding is being siphoned. That is probably not a good term, but is being redirected at the district level to other local schools and that charter schools are not getting, again, the fair per pupil or per rata share of Federal funding and I wonder how widespread that problem is?

Ms. Blanchette. Well, we found, again, based on self reported data from the charter school operators that most of the charter schools, two-thirds that apply for Title I funds got Title I funds. Four-fifths of those that applied for IDEA funds got IDEA funds. Now, whether there were other schools that were eligible that did not apply that we do not know. And, if schools that applied and did not receive funds, if somehow they were really eligible, that we do not know.

Chairman Riggs. A couple of other quick questions. Did they receive the equivalent per pupil expenditure or per pupil amount?

Ms. Ganson. We do not know that.

Chairman Riggs. You have no way of knowing that?

Ms. Blanchette. We do not know that. It is difficult to determine because the actual allocation to a school within an LEA is based on that school's relative ranking.

Chairman Riggs. Right.

Ms. Blanchette. And, it varies among schools.

Chairman Riggs. Okay. Let me ask you, to your knowledge, how are charter schools using Federal start up dollars under the Federal charter school law and are they specifically using these very limited Federal funds for equipment and leasing a building or, you know, leasing premises in which to operate a charter and for any other real estate or property related expense?

Ms. Blanchette. They are using the funds for a variety of uses and I will let Ms. Ganson and Mr. Appel expand on that.

Ms. Ganson. I would say that there were four general categories that they use the funds for; they use them for facilities. And, basically by that, we mean they, they use the money to meet code, meet fire code, meet health standards, whatever that involved. They used it for curriculum development and materials. They used it for equipment and the kind of equipment, a lot of technology computers, playgrounds, that kind of equipment. And, the fourth category would be training and professional development and that also includes setting up networking with other charter schools within the State or nationwide. So, I would say generally I mean, there were other miscellaneous uses for start up like insurance costs, initial leasing costs, but generally they fell into those four categories.

Chairman Riggs. Mr. Martinez.

Mr. Martinez. Thank you, Mr. Chairman. Just to follow up a little bit on what the Chairman was asking about the new administration because I am familiar with this in a lot of regards and it is out of life experience really. Anytime you have something newly organized there is going to be a new experience and most of these charter school administrators have not had any previous administrative experience, right?

Ms. Blanchette. I do not know. We did not assess the we did not determine the characteristics of the administrators or assess their capabilities.

Mr. Martinez. Well, take my word for it. Most of them have not. And, as a result, they are reinventing, trying to reinvent the wheel from scratch, unless they were a charter school that was converted from an existing public school. Right? But, when you try to reinvent the waters, like a new city just starting up when a new city starts up. That new city does not know what Federal funds they are eligible for, they do not know how to apply for them, they do not have a grant writer, they do not have a lot of things. They get it takes them years to really get up to speed in that regard. Same as when a new Congressman comes here, you know. He does not know where the bathrooms are. You have got to show him. And, as a result there are a lot of things that he is not knowledgeable of that he is eligible for, services that are available to him, are there until a few years until his staff, because most of them hire a new staff to come with them. If you hire some of the older, experienced staff, they may help you find your way. But, it is the same thing. So, I am glad that the GAO found that they are not at a disadvantage as far as the Federal funds that are allocated to them from those two different programs. The thing that disturbed me is that, and as I said in my opening statement, is diverting monies from public schools as they exist today to these charter schools, other than that the charter schools are entitled to it, that entitled to as ADA. That, that is fine. But, the public school system's already weak and already in many cases does not have sufficient money, the start up money that we give for the charter schools to buy the books and equipment and all that, that could be buying computers for classrooms in public schools that already exist. The problem that I have is that, and going back to this ranking, you said that the school district ranks the schools eligible for the chapter I money and the IDEA money and those are based on poverty levels. The fact is, is that it could happen, that if somebody would decide, which is not really the problem, and, let me ask you this. To me, the problem is, and you mentioned it a little bit, is technical assistance and outreach to these schools to train them for what they need to know. Would we not say that is the bigger area of need?

Ms. Blanchette. That seems to be the key facilitating factor at this point, that that is what charter school operators have told us and given the nature of the problems, the barriers that I listed, and that we have discussed more fully in the statement, these are basically start up problems. You are absolutely right. And, a solution to some of them would be training, technical assistance. I would like to say in response to your comments, the charter schools are indeed public schools and about 60 percent of charter schools are converted public schools, regular public schools that converted to charter school status. So, for, you know, to a great extent, the students in those schools are students that were formerly in public schools or would be in public schools in the absence of charter schools, regular public schools.

Mr. Martinez. To the extent that the people who are in charter schools, it is because their parents looking for a better education, drove them there and the other parents, the same thing. Those that are not aware of the advantage of a charter school are going to be stuck in the public school, the other public schools. Let us say, I should start saying that, the other public schools–

Ms. Blanchette. Right.

Mr. Martinez. that are not receiving this special attention and see, that is my problem because the problem still remains. We are just running away from the problem. We are still not addressing the bigger problem that every kid in every school should get a quality education. You know, we in California had a suit; it was called Sorano v. Priest and I think you are familiar with that, in which we found the inequity of funding of schools. In Beverly Hills, it was three times the ADA that was, Park, the city that I represent. I am very familiar with that. That was a good number of years ago and to date, the suit, the result of the suit was mandated and equalization of funding. And, today, it still has not happened and now we are going to charter schools which there are, in the minds of some, a way that we may never obtain that equality with somebody concentrating on something new when they should be concentrating on equitable distribution of funds, State dollars, because most remember this, most of the funding for new schools come from the State, through the State. It is not Federal money.

Ms. Blanchette. That is correct.

Mr. Martinez. That money is only about six percent and only for those particular programs that we mandate to them. So, it is a it is kind of an irony that when we are looking at this, we are looking at the gold ring or the brass ring but we are not looking at the obstacles between us and that brass ring in education. Thank you.

Chairman Riggs. Thank you, Mr. Martinez. Mr. Johnson.

Mr. Johnson. Thank you, Mr. Chairman. Would you define what you mean by technical assistance that they need?

Ms. Blanchette. Information on what Federal funds are available because we are, we are talking strictly in the context of obtaining Federal funds and focusing on Title I and IDEA.

Mr. Johnson. So, what you are talking about is, is administrative technical assistance primarily?

Ms. Blanchette. First, the awareness that funds are available, awareness of what the process is for obtaining those funds, perhaps assistance in filling out the application. It could mean computer software assistance if that is what it takes to most expediently apply for the funds.

Mr. Johnson. Have you been involved in any of these studies before with schools?

Ms. Blanchette. I do not know what you mean by involved in.

Mr. Johnson. Have you done a study with schools before, public schools?

Ms. Blanchette. I have done well; I am the Associate Director for Education and Employment Issues at GAO.

Mr. Johnson. I understand that.

Ms. Blanchette. And, we have done a number of such studies.

Mr. Johnson. Yeah. And, so, have you found this to be a problem throughout our public school system and not just the charter schools?

Ms. Blanchette. Oh, I, yes, I would agree with you. It is not something that is peculiar to charter schools.

Mr. Johnson. Are they using any of the Federal funds to help improve the teacher's ability to educating?

Ms. Blanchette. The funds are, a good deal of the funds are going for professional development.

Mr. Johnson. They are?

Ms. Blanchette. Yes.

Mr. Johnson. And, in all of the charter schools?

Ms. Blanchette. Well, I cannot say in all of the charter schools.

Mr. Johnson. The ones that you looked at, I mean.

Ms. Blanchette. In terms of the categories, I cannot say that for any particular type of use of the funds at all schools used it for that purpose, no. But, professional development was one of the major categories that we found in the schools that we surveyed.

Mr. Johnson. Yes. Okay. Do you think that is an area that ought to be given high priority?

Ms. Blanchette. I believe it should based on our survey results.

Mr. Johnson. From what your studies show now and in the past?

Ms. Blanchette. That is correct.

Mr. Johnson. Yeah. Good. Well, I hope they will do that. And, do you, you did not answer the question and I do not know if it was ever asked directly by Mr. Martinez or not, but, do you see any public monies coming out of the current public school system now given the fact that these are public schools? Are the Federal monies being equitably distributed across the board in your opinion?

Ms. Blanchette. Well, as I said earlier, based purely on our survey results and perceptions of school operators cause that is all we have at this point to go on, it appears that there is no systemic disadvantage to charter schools in obtaining these funds. I cannot tell you that in a given instance in a particular State in a school district that there is not a problem. But, in terms of the perceptions, that is not a widespread systemic problem. Terms of diverting funds, I cannot answer that because I am not sure what diverting funds would mean in this case because we have public schools in both instances as you recognize. And, unless a charter school becomes or is treated as an LEA and gets funds that it would not have gotten otherwise. But, that is not really diverting funds because the law allows for that. So, I am not sure I can answer that question.

Mr. Johnson. Thank you for your opinion. I am not sure I could either.

Ms. Blanchette. Excuse me. Mrs. Ganson would like to add.

Mr. Johnson. Thank you.

Ms. Ganson. Yeah. In one State, what we found was that the first year that the school received the Title I funds, the home district that would have received some of that money also received that same amount of money just in terms of continuity, so the State backed it up and provided money not only to the charter schools but also to the districts so that they would have, it would make it easier to transition to the lower amount of money.

Mr. Johnson. Well, the statement had been made earlier that some of the people running these charter schools are not experienced. Did you find that to be true? I thought some of them were actually transferred from an existing school into a charter school?

Ms. Blanchette. A number have. And, as I said, we did not assess the capabilities of the charter school operators.

Mr. Johnson. Okay.

Ms. Blanchette. But, you are right. A good number of the charter schools are converted public schools and a good number of the operators are experienced educators. I have met with some and talked to some.

Mr. Johnson. So, theoretically, they should know about the public funds availability, right? Theoretically?

Ms. Blanchette. Theoretically.

Mr. Johnson. Unless a school system itself does that work. Thank you, very much. Mr. Chairman, I yield back the balance of my time.

Chairman Riggs. Thank you, Mr. Johnson. The sheet I have been given indicates that the order of arrival for Members on the Democratic side of the aisle of the Committee here have Mr. Scott next. Mr. Scott. He is waiting in the wings. Mr. Scott.

Mr. Scott. Thank you, Mr. Chairman. Ms. Blanchette was your study confined to the question of access and distribution of funds?

Ms. Blanchette. Yes. Title I and IDEA funds.

Mr. Scott. So that, you did not get into whether or not the charter schools are successful, how people got into the schools or anything like that? It is just the question of allocation of funding?

Ms. Blanchette. That is correct.

Mr. Scott. Your report raises the issue that some of the costs of getting a grant, the application process sometimes made applying for the grant unproductive and that was one of the problems. Could any of the charter schools kind of join in to the LEA's, although they were separate, for the purpose of applying for monies with an understanding that when the money came in the LEA would divide the money with the charter schools appropriately?

Ms. Blanchette. Are you speaking in terms of getting assistance from the LEA's and applying for the funds?

Mr. Scott. No. If a charter school is its own LEA and the local school board would apply for money, could the charter school abrogate its little numbers with the school administration, local school administration, have the whole money come down and then divide it up locally so that the charter school would not have to hire a grant administrator?

Ms. Blanchette. I do not believe that is possible under Title I. Under IDEA, until this year, schools that would have received less than $7500 in IDEA funds, were not eligible to receive those funds on its own and those schools did have to join with other schools or school districts. But, that is not the case this year. The law was changed in that regard.

Mr. Scott. So, they can not do that, should that law be amended so that they could join in for the purpose, cause I can not imagine a local school system hiring a grant administrator to go through the Federal regs to figure out how to apply for what in their case would be just a few thousand dollars. Because, generally, you let me, if I might, just ask you because I think this is an important point. When a charter school comes into being and they receive an allocation of public monies, is that allocation based on the assumption that the charter school will then be doing its own administrative overhead or is that shared with the LEA or is there different models in different States because, obviously, it is like a person who decides they want to be an independent contractor. Whoops, I forgot I had to pay the other half of social security tax. You know, because their employer was paying it. These little things you do not think of. But, is the assumption here that they get some allocation of administrative dollars that were going to that school and that is in their pool of money to do with what they will or do districts pick that up as they did before the charter schools?

Ms. Blanchette. It varies.

Mr. Scott. It varies. So –

Ms. Blanchette. It varies.

Mr. Scott. So, there is not a strict model here?

Ms. Blanchette. That is right. It depends on the particular law and the State. It depends on what the charter says; the charter is a contract between the charter school and the chartering authority. It depends on what it says.

Mr. Scott. In claiming my time, do you have any recommendation of how a local charter school could administratively apply for monies which their allocation may be only a few thousand dollars?

Ms. Blanchette. Well, it is certainly valid not to, not to use your resources when you are going to pay less than you are expending in seeking the resources. So, although that was listed by some as a barrier that is not necessarily a barrier that needs to be fixed unless the law itself has changed.

Ms. Ganson. Yeah, in one particular school that I talked with, he was saying the first year they applied for the Title I and IDEA and that after, and in the next year they started applying for some of the other smaller grants, once they had figured out the process for Title I and, you know, that went fairly quickly, then they started, you know, applying for some of the other grants. So, I think that, again, it is sort of the start up in the learning curve.

Mr. Scott. The charter school would have to have someone at the school competent to go through the Federal regulations to try to apply for everything that they would be entitled to.

Ms. Ganson. Well, this is where the State or the charter school office at the State talks with the charter school, helps them, alerts them to grant opportunities. So, I think this is where technical assistance plays in.

Mr. Scott. And, so, you do not think any statutory change needs to be made to address that?

Ms. Blanchette. Well, I really cannot respond in terms of whether there is a statutory change. I am sure there are statutory changes that could address that. The situation an individual charter school finds itself in varies across the country. There are some States, Arizona for example that provides a good deal of technical assistance from the State education agency to charter schools. There are other States where that does not necessarily occur. There are situations where a charter school has a relationship with its, with the district in which it is located or the county and gets assistance and grant administration and other ways from that entity.

Mr. Scott. Thank you, Mr. Chairman.

Chairman Riggs. I thank the gentleman. I might also point out that we heard in one of our earlier hearings that there were also some interesting relationships going on right now between institutions for higher learning like colleges and universities in newly formed or newly established charter schools. In fact, I believe it was the Rand Corporation study that indicated that colleges and universities may be the most, the most effective, most successful and in this limited inexperience that we have had with charter schools, most effective chartering entities, if only because they, many times, have the facilities in which to house charter school and the gentleman may recall that we had a witness, I believe, from Central Michigan University at one of our earlier charter school hearings on this subject. Mr. Roemer.

Mr. Roemer. Thank you, Mr. Chairman. In terms of the application process and time, it seems that you have said that many people have been finding this burdensome, many did not have the time, money or resources to apply for funds, but you have also found as a key that in terms of facilitation of funds, that charter school operators found that outreach and technical assistance were key factors in facilitating the access to Federal funds. You just mentioned, in response to Mr. Scott's questioning, that Arizona has done a better job of reaching out in terms of providing technical assistance to those entities interested in this. Is that in their charter or is that something that they have established on their own or is that something that they have done because they are one of the States with the most charter schools?

Ms. Blanchette. I will let Mr. Appel answer that because he did visit Arizona.

Mr. Appel. That is— it is not addressed in their charter and, although our sample was not designed to draw some State–results, there were some interesting anecdotes coming from almost all of our charter school–in Arizona and that was that it was very good at notifying them their eligibility for Federal funds, sending them the information, calling them back if they had not heard from them, offering them technical such as workshops, offering to make visit to the schools to help the operator fill out the paperwork.

Mr. Roemer. Did you find other States particularly helpful in these myriad of areas?

Mr. Appel. We have heard of some charter school operators did say they did receive help from the State.

Mr. Roemer. But, did anybody else seem to be as organized as Arizona? California has a number of charter schools. Michigan has a number, Minnesota–did others have either the similar parallel type of operation or something unique that seemed to help in additional ways?

Mr. Appel. Not at this point, but in part that may be related to where we are in our sampling, that we have talked to more people in Arizona as opposed to other States. That is something that we will be looking at as we continue our work.

Mr. Roemer. I want to come back to that in a minute, but how about outside organizations in addition to the State? You mentioned the State of Arizona. What about nonprofits being effective in providing assistance? Did you have specific contact with either nonprofits or institutions of higher learning?

Ms. Blanchette. We have not talked to any institutions of higher learning, I do not believe. We are certainly aware of nonprofit organizations that are in existence to study and/or facilitate charter school operations and they certainly can be a source of assistance.

Mr. Roemer. Had you found that to be true in Arizona or any States that you have studied so far, the contact of the nonprofits?

Ms. Ganson. In terms of the survey responses, and again, they are preliminary, what came out was, from the schools that we talked to, was that those schools in Arizona cited the assistance they received from the State as extremely helpful, the many different forms of assistance they received. We did not hear of any other particular organization or network, nonprofit or otherwise, that came out in terms of the survey as being particularly helpful. Again, though, we are only at, you know, about 30 out of 50, so –

Mr. Roemer. And, in terms of 30 out of 50, the 30 are have you studied just specific States?

Ms. Ganson. Yeah, they were just–we sampled and we–and it was a representative sample, so we have a sample of 50 and of those the 32 were random. So, you know, there are more Arizona schools in our sample because there are more –

Mr. Roemer. Do you have more Arizona schools to go? Do you have more Arizona schools to go to get to 50 or are you done with their –

Ms. Ganson. Probably. Yeah. I would say yeah.

Mr. Roemer. Have you found, in terms of looking at this issue of funding through Title I and IDEA, have you found anything that is surprising or contradictory with what we have seen in the Hudson Institute or the Department of Education preliminary reports? Anything just jumped out at you that is a contrast and stark contrast or problematic or complimentary?

Ms. Blanchette. Well, we were a little surprised to find that the majority of the operators believed that they were, they were getting an equitable distribution.We thought that there would be more concern there. But, we are speculating, of course, but because the nature of the problems or barriers that were encountered were start up costs or start up issues. It may be that five years from now or two years from now somewhere down the road that the perceptions will change, as operators became more knowledgeable. So, this is as we keep saying, preliminary and we do not want to have anyone take this information and go too far with it in terms of what it all means at this point.

Mr. Roemer. And, when will you be done with this report?

Ms. Blanchette. Our report is due out in April of 1998.

Mr. Roemer. All right. Thank you, Mr. Chairman.

Chairman Riggs. Thank you, Mr. Roemer, especially for your leadership on this particular issue. It will be interesting–I do not know, Ms. Blanchette, if you will be able to stay but I hope you might for the second panel when Dr. Chan has an opportunity to testify about her experiences in helping to establish the Vaughn Learning Center and her interaction with the Los Angeles Unified School District.

Ms. Blanchette. I would be glad to.

Chairman Riggs. I think it might be enlightening. Mr. Miller.

Mr. Miller. Thank you, Mr. Chairman, and, again, let me thank you for your report. As I read the part of your report starting on page 12, "The charter schools officials cited several barriers to receiving Title I and IDEA funds," it sounds to me like, like there are a lot of dynamics going on between charter schools and local school districts and the State systems of education that, I guess you could say you expect, as these entities come into existence, you know, the question of prior enrollments and eligibility for Title I and IDEA funds are a question of State guidelines and the example that you cite on page 12. "One State, charter school officials must manually match their student enrollment records against State and local aid, AFDC." I assume that is something going on there between the date and that charter school. We do not require people to manually do it because –

Ms. Blanchette. No. No.

Mr. Miller. –as you point out, the local district does it by computerization, but somehow they are not sharing, they are not sharing enrollment of information or what have you. You cite, in some cases, that charter schools are not able to get back the data from parents because those parents do not want to give it. Well, then, so be it. Then you do not get the funds. I mean, these are sort of basic, generic laws that we have about the accountability and the use of funds. The question of whether you are an LEA or whether you are a charter school within an LEA is how the State determines they are going to treat you, no how we determine we are going to treat you, but we have rules about qualifications for these funds because you get down to the minimis amounts –

Ms. Blanchette. Right.

Mr. Miller. It evens the pain in the rear for us in terms of accountability and so we cut off at 7500 schools or students or we cut off at certain thresholds. But, again, if the State wants to make–really it can make you an LEA apparently. In California, I think our charter schools are not separate LEA's; they are part of that.

So–and then I find it kind of interesting that part of this seems to be, again, if you read through these–part of this is that charter schools do not necessarily bring with them at inception all the resources that were available to them.

You cite, at one point, a person saying that if she had to simply sign her name she would not have time because she is sort of serving as counselor, janitor, teacher, cafeteria worker and all the rest. Again, that is a question about the resources that are being made available by the local district as you sort of step right out–charter schools.

I was also intrigued with the notion that–I guess some of these charter schools were finding out that those supervisors in the local district office that they railed against all the time may be were providing some functions to schools, but, again, that is a readjustment process, that a good number of the people in the surveys found that the Title I application was not at all difficult as opposed to those who thought it very difficult and some–less than half thought the IDEA application was very difficult, but more than half thought it was somewhere or not at all difficult. And, then, in Arizona where you say there is the highest level of technical assistance, we have somebody saying that they would have to pay $85,000 to get $35,000 in grants. Either he has hired the slowest grant writer in America at the highest salary or something is very wrong with that anecdotal–and, I mean, I think there is a mismatch here.

If a good chunk of people say it is not very difficult at all and this person says it cost me 85,000 to get 35,000, and he is also in a State that you think has some of the highest technical assistance, something is wrong with that anecdotal piece of evidence. It is clever but I am not sure it is accurate.

Ms. Blanchette. Well –

Mr. Miller. What is important is we get through this because there is a lot of anecdotal levity right now, for people who do not like charter schools and for people who are cheering sections for and, somehow we have to sort that out because that becomes a weapon in somebody's hand for or against charter schools.

Ms. Blanchette. Right. All of what we have from our survey, of course, if self reported.

Mr. Miller. Right.

Ms. Blanchette. But, it does demonstrate the variety of not just perceptions and opinions, but the variety of what is actually going on across the country if we go to charter schools.

Mr. Miller. Well, I think it is rather interesting because it is exactly that, that, you know, there is not one large barrier that is Federally imposed or that is State imposed or parental imposed or however you–this is sort of the mix and match that you are going to get as you start different charter schools, different problems, different types of problems in different localities and with constituencies.

And, let us not pretend that everybody who starts a charter school is a genius. And, let us not pretend that they are the best administrators. This is not the perfect administrator and principal and teacher and they have it right. It is a mixed bag out there. And, as we see staffs turn over and people realizing that they need a–with other charter schools or they, they need some help against the LA School District or what have you. I think it is kind of, in a way, kind of a pedestrian story about starting up new institutions within the confines and what rivalries you might expect and help and everything else and within a huge structure is the American public school system.

But, I also worry that we not be left with just anecdotal evidence because you could argue that if you have hired somebody for 85,000 to get you 35,000–or you could argue that by the same token you were not taken–you were not clever enough to take advantage of technical assistance that was available to other charter schools in that State system. We need to know which it is.

Ms. Blanchette. Right. And, it may be that particular operator did not know of the existence of the assistance.

Mr. Miller. Well, you might have caught them on a bad day, too.

Ms. Ganson. Yeah, I –

Mr. Miller. Thank you, very much. Excuse me. Go ahead.

Ms. Ganson. No, just one point and that is, and I think it relates to the start up is that the first year it probably is it may cost them more to get the money but in the long run, it is going to cost them a lot less as they learn and it goes faster and they become more expert which is what happened with the one particular school that I talked with. You know, the first year it took them a lot longer. Second year, he, you know, applied for more grants because he had gotten the application process down for one.

Mr. Miller. And, I think that is kind of the nature of start up businesses –

Ms. Ganson. Right.

Mr. Miller. If you will.

Ms. Ganson. Right.

Mr. Miller. You know, the best business plan does not necessarily work out in your first year of actual experience.You can figure it all out but there is some oversight or some change of circumstances and I do not know why we would expect anything different from these. Thank you.

Mr. Payne. Thank you, very much. Also, appreciate the hearings on this, on charter schools, the several that we have had, something new and a lot of us old timers are trying to get a fix on just, you know, what this, what this whole move–where it is going. Now, you indicated that there–on the State level the State education department have a agency or administrators that deal specifically with the charter schools. Is that the way it generally works?

Ms. Blanchette. At least in some of the States.

Mr. Payne. What, what have you found–unfortunately, I have just got this–your report, so I have not had opportunity to read it, but I was wondering what have you found or if it is in the report, the relationship between the local charter school and the local education LEA in the area and how have they been working together?

Ms. Blanchette. It varies. In some instances, the school district is the chartering authority, which means that the contract is between the charter school and the district. And, their particular relationship should be spelled out in the charter and I would think in those instances there is probably a closer relationship then if some other entity or the chartering authority. In some instances, charter schools still get services from the district, perhaps janitorial, custodial service or personnel support or payroll or–in some instances charter schools are totally autonomous, fiscally as well as in terms of their academic program and that they have little or no relationship with the district. So, it does vary. Some districts are more predisposed to accepting charter schools and wanting to encourage them than others.

Mr. Payne. Well, do you think that as time goes on there will be sort of a prototype of what makes, say, a good charter school. I mean, they are–small business but there are certain things that you do in order to stay in business as it relates to just, you know vegetable soup. I just wonder, you know, what–in your eyes and since you have done the study, what would–what would, what do you think an ideal charter school ought to be like?

Ms. Blanchette. Well, I do not know that there is an ideal charter school. The whole idea of having charter schools is that it allows for innovation and it allows the different approaches for different populations and different clientele. So, I am not sure that the idea of looking for an ideal model is even a good one.

Of course, as with any organization, any particular business you are in, you need to know what resources are available, how to access those resources. In this case, the resources we are focusing on are Federal funds. You need to know how to access them. You need to do things that help you show your eligibility if you are, indeed, eligible for those funds.

So, within the context of our survey and the work we have done, there certainly are things that charter schools need to do to be more effective in getting Federal funds. But, in terms of some ideal model, I think that goes counter to the whole idea of having charter schools and also counter to our experience with our local education and how it varies across the country in regular public schools. And, for that matter, in independent schools or parochial schools. There is a lot of variation and a lot of things work.

Mr. Payne. What about them that do not work and there are no expected outcomes? I mean, if it is just pie in sky–in the air, let it be whatever it will be?

Ms. Blanchette. Absolutely not. Another key characteristic charter schools should be, that the charter schools are accountable for outcomes and those outcomes should be defined in the charter and agreed upon before the school starts operation.

Mr. Payne. The–well, that is good. I am glad to hear that. The area in here that talks about trying to be sure that the charter school access is Federal funds, Title I, IDEA money, etc., I have more of–and that is a concern and I will–fair share, but I have a concern about not so much the charter schools getting the money because they should get it but I am a little interested in, you know–and, I am sure your answer is going to be like it has been, but, what kind of kids are getting to the charter schools by and large? I mean, have you been able to make any kind of determination?

Ms. Blanchette. That was not the focus of our survey but I will tell you from schools I visited and what I have heard along the way, it varies. I spent a week in California, for example, visiting charter schools, talking to officials at the LA Unified School District. We talked to some people on the State level.

It was in the area that we visited; there was a charter school that had mostly students from upper middle class families. There was another charter school nearby that had mostly children from low-income families.

It varies across the board. These are public schools and these schools cannot deny access based on any particular characteristic. If a school has more applicants than it has space, it has to give out its spaces, positions and some kind of fair and equitable lottery, some type of system. So, charter schools are not like public–private schools in the sense they can select their clientele. They have to take the children within their district. In the case of California, any student in California is eligible to attend any charter school if the parent can and is willing to get the child there.

Mr. Payne. Yeah, that is another, of course, concern. As you know, many of us have concerns about the whole question of access. You know, a typical kid who probably needs a charter school the most, his parent is probably not even dressing him to get to school even if he is a preschooler or he is on his own so to speak. So, charter schools are certainly not going to help those that need help the most. That is very clear. And, therefore, many of us who have concerns about the poor stage of public education.

Of course, we–it is an abomination, terrible. Of course, we do not think, necessarily, that–and perhaps it is not supposed to be a panacea–and I am merely trying to find out what it is really supposed to be. The persons, the youngsters, the ones who need it the most, of course, are indeed, and in fact, by and large, not going to get it.

Mr. Roemer. Would the gentleman yield?

Mr. Payne. Yeah.

Mr. Roemer. I do not want to debate the gentleman on the question of charter schools and I do not want to–I certainly do not want to legislate by anecdote here either, but to give you one example of a charter school that I visited to follow up with what the GAO has just told you, this was a school in Washington, D.C, 100 percent of the students were minority students, 100 percent were eligible for free and reduced school lunches, so they met the poverty criteria.

Each and every student was two to three grades behind where they should have been. Almost every student had been either kicked out of the D.C. school or had been told that we cannot help you for one reason or another. This is a school that is a charter school that is specifically designed to help those students most in need, most vulnerable and falling quickly through the cracks of the current public education system. Now, that is not every charter school. But, it is certainly left up to the local school district to try to provide these kinds of charter schools, not just in D.C. but in LA and in New York and other places.

Mr. Payne. Okay. Just to claim my time before it expires, you know, the first room and probably the only thing I remember in logic when I went to college was that you do not go from the particular to the universal and that is good for that school. It is certainly a particular and I am very sure if you then use the syllogism you would not conclude that that is the average charter school. But, my concern is certainly that we; we have to understand, even in the town that I live in they have got three charter schools. The State does it. The Governor picked them.

You know, one is way up at the end of the city so the typical kid that really wants to go there, they are not going to be able to get there unless the parent has some transportation. Maybe the kids in that area can get there and that is fine cause there are certainly enough kids in that area. But, you know, I just have some concerns about the public school system as we know it and with that, it just appears that although they appreciate Mr. Roemer visiting that school and they are probably some other good–hopefully, there are a number of those around. I still think that that is going to be the exception to the rule. There is nothing we can do about it cause charter schools are here and that is that. But, I think that I am more concerned about who will be able to be served, who will be served and I hope that maybe the GAO might, you know, do a study, when you get a chance, on that.

Chairman Riggs. Thank you, Mr. Payne. And, Mr. Miller, if you will withhold for just a moment. I am going to make a couple of other comments or questions and then I will recognize you to close on your side. Ms. Blanchette, now that–we all received, I guess, the study late last night so we are sort of–we are still in the process of familiarizing ourselves with the content and the findings and I note what I think is some dissidence running through your report because you say that regardless of funding model, more than two-thirds of charter school operators expressed an opinion that they received an equitable share of both Title I and IDEA funding. So, that is two-thirds.

Yet, on the other hand, you found that more than two-fifths, two-fifths, 40 percent, give or take, of the charter schools you surveyed received Title I funds. So, in other words, less than half of the schools you surveyed actually received Title I funds and then you have a chart on page 9 indicating that of the schools, charter schools surveyed, 14 actually received Title I funds and 18 did not. So, it appears that despite the impression that many charter school operators or administrators have, the–at least with respect to Title I funding in your very limited study, the majority of charter schools are not receiving these very important Federal education dollars.

Ms. Blanchette. This table, this table–in the table we account for all 32 schools that we have now talked to as a result of our telephone survey. Some of those schools did not apply for funds. And, in fact, the table one on page 9, we have as a footnote there that 11 of the schools that did not receive funds did not apply for them.

Chairman Riggs. Well, let me ask you, then, because that is a good–to my next question. What–did you find anything in your study and your survey of these some 30 charter schools in these particular States, did you find anything that the Department of Education is doing specifically to notify charter schools that they may be eligible for Federal categorical aid such as Title I, special education, Eisenhower drug free schools and the like?

Ms. Blanchette. No.

Ms. Ganson. Not based on what the operators –

Chairman Riggs. So, in other words –

Ms. Ganson. Not based on what the survey operators told us. Some of them who did not apply knew they were not going to get them. Some of them it was past the deadline. Some of them got the package and it looked daunting so they basically said, we will try it next year when I have more time.

Chairman Riggs. Uh-huh.

Ms. Ganson. There were different reasons.

Chairman Riggs. Okay. Now, you also talked about several barriers the charter school officials cited in your study and I guess, which primarily consisted of a phone survey.

Ms. Blanchette. That is right. Perceptions of the operators.

Chairman Riggs. To receiving Title I and IDEA funds, I am intrigued by the one paragraph on page 14, "Schools operating under the dependent funding model", which you called the dependent funding model.

Ms. Blanchette. Right. That is where it is a school within a school district.

Chairman Riggs. The school within the school district may face more barriers than to schools operating under the independent funding model, i.e. as their own LEA, their own school district, because dependent model schools must go through an intermediary or a school district in accessing Federal funds rather than receiving funds directly from the State.

One charter school operator, and I want to find out if it was only one out of 30, one charter school operator told us that she believed that her school's parent LEA unfairly used its discretion in allocating funds to schools within its district. She said that other schools in the district received higher funding levels than did her school. That was–that goes back to my earlier question, whether there was some sort of, you know, difference between the funding level that charter schools were receiving and other schools.

Ms. Blanchette. That, that was that operator's perception.

Chairman Riggs. And, that was the only such instance that you encountered –

Ms. Blanchette. Yes.

Chairman Riggs. –in your study?

Mr. Appel. There were not many. I believe there may have been one more where we heard that the school operator felt that the district was not providing as much assistance as the operator would have liked.

Chairman Riggs. Okay. I ask that because in our field hearings we have heard anecdotal testimony that as your report suggests, that there is a certain amount of discretion that LEA's have so in the dependent school model there are those charter school operators out there who think that they are being treated in a disparate or unfair manner, that they are being singled out, if you will, for special treatment of special status because they are a charter school.

Ms. Blanchette. And, as we reported, that perception is certainly there but apparently not widespread. We also say in our statement that from the perspective of school districts, charter schools receive relatively speaking, a small portion of the resources within the district and the district–some districts do not have the resources to develop to helping charter schools along because it has all the other schools to deal with. So, that is a different side of the story.

Chairman Riggs. Let me ask one other thing and that is, your professional opinion, as we consider reauthorizing the Federal charter school statute, and just by way of announcement to the–first of all, to my colleagues, and to our audience today, I would like to indicate that it is my hope we could potentially move a bill at the full Committee level at the end of this month and bring that legislation to the House Floor in early October. As we consider reauthorizing, revising the reauthorizing the Federal charter school statute, should we require the chartering entities to use their best efforts to ensure that local charter schools receive their fair share of Federal categorical funding?

Ms. Blanchette. Heavens. Is this one of those mom and apple pie questions? Obviously, that is what the chartering authorities ought to be doing, the States ought to be doing.

Chairman Riggs. I think it is more than the mom and apple pie, but if you want to classify it that way, that is fine with me. But, I think, given some of the difficulties that you have identified through your fine efforts and through the study, given the fact that you did not hear, and correct me if I am wrong on this, from any of the local charter schools surveyed that they had been contacted or notified by the U.S. Department of Education and offered assistance in obtaining Federal categorical aid, I think yes, it would be a good policy to require chartering institutes to use the best efforts to drive that money down locally under the general rule or principle that the funding should follow the child.

Ms. Blanchette. This, of course–and, you asked me a question on professional judgement and I will answer it based on, you know, having looked at a lot of programs for a lot of years, one way other programs provide for technical assistance is to actually set aside funds for it, either for the Department of Education or for SEA's, but that is a common way of making sure that technical assistance gets some focus.

Ms. Ganson. Yeah, in our discussions with the Department of Education, Title I staff in particular, they did say they were getting calls from some of the charter schools and they were trying to help them or directing them to the State Title I people, but if the State Title I people, it was not clear, they were trying to give them further guidance. So–but, we did not hear in our survey from people saying that they contacted the Department of State. That does not mean it did not happen. I mean, Education. That did not mean it did not happen.

Chairman Riggs. Mr. Miller.

Mr. Miller. Thank you. And, just a follow on–I think, you know, part of the problem here is that States make determinations where charter schools will fall, either as independent or, as you say, dependent and Federal law then applies to them as a separate entity or as part of a larger, a larger district. And, we sort of, we sort of make those determinations here. I assume that the statement that Mr. Riggs is talking about for charter schools, every public school would like to have that said on their behalf because they are sort of like Members of Congress before the Appropriations Committee. Come on; be fair, you know. Like the transportation bill–you know, we all like our fair share back in our districts but if you give everybody their fair share it adds up to about 700 percent of the whole.

But let me ask you a question here that is maybe a little disturbing to me and maybe you can clarify it. On page 14, you–in the last paragraph, you say, "Moreover, some charter school officials have a philosophical difference with the IDEA requirements and forego IDEA funding because it does not accommodate their educational methods according", and they talk about that they think all children are special.That is all interesting except there is a Federal mandate on local school districts to provide for the education of disabled children and to provide them with the means by which to receive that education accordingly to their disabilities and the needs to work with those disabilities. Does this allow charter schools to escape the mandate if they do not take the money?

Ms. Blanchette. No, absolutely not.

Mr. Miller. And, if they do not take the money does this prevent the Federal government from enforcing accessibility and individualized education plans?

Ms. Blanchette. No. The requirement is there.

Mr. Miller. I have to agree with this–except from the other end. I thought all children should get an individualized education plan so parents could judge what was –

Ms. Blanchette. And, that was the point, that–not that this particular school was not taking care of its disabled population, but that it was requiring or having all students have plans and follow those plans.

Mr. Miller. But, it is still required to have a plan for the –

Ms. Blanchette. Right.

Mr. Miller. That speaks to the need of that disabled student.

Ms. Blanchette. That is right, whether or not it gets Federal funds for that purpose.

Mr. Miller. Whether or not they like it or not?

Ms. Blanchette. Right.

Mr. Miller. So, this is not, this is not a choice here.

Ms. Blanchette. Right. Absolutely.

Mr. Miller. Thank you.

Ms. Blanchette. As Mrs. Ganson just pointed out, apparently–with respect to an educational development plan for a disabled student, parents can waive the right, waive that –

Mr. Miller. I understand.

Ms. Blanchette. If they agree.

Mr. Miller. Right. But –

Ms. Blanchette. But, in the absence of that waiver, you are absolutely right. The schools are required –

Mr. Miller. The charter school, if the charter school does not take these funds, that does not prevent them–does not give them the right to prevent the enrollment –

Ms. Blanchette. No, that is right.

Mr. Miller. of a disabled child?

Ms. Blanchette. That is right. And, if the child enrolls they have to provide the services.

Mr. Miller. That is clear to these charter school operators?

Ms. Blanchette. That I cannot answer.

Mr. Miller. As you look for the April you know, I worry that, again, off the cuff remarks or anecdotal statements, some people think that is policy. Now, the policy of this nation is those kids are going to be having access and they are going to have an education plan and they are going to have an education.

Ms. Blanchette. Right.

Mr. Miller. That is the policy of this nation.

Ms. Blanchette. In terms of this particular operator and this particular statement, I do not think there was any desire not to follow the requirements of IDEA. I think the point was they do the same thing for each student. I believe that was the –

Ms. Ganson. The philosophy that every that children learn differently and children have different needs and that their philosophy is to meet those needs and to do that they will have smaller classes, they will have additional resources that focus on those needs, but the idea that they do not want to label this group of children and make them different in any way, that that–you know, every child has individual needs.

Mr. Miller. I appreciate the statement but the national policy still is that that child will have a plan of education directed at the needs of that child taken into account the disabilities of that child.

Ms. Blanchette. Right.

Mr. Miller. Thank you.

Chairman Riggs. Thank you, Mr. Miller, for your comments, I think, which are very, very important and would–to go back to the first year report by the Department of Education and OERI on charter schools which found that charter schools serve, on average, a slightly lower proportion of students with disabilities or special needs except in Minnesota and Wisconsin and that charter schools have, on the average, a ratio composition roughly similar to statewide averages or they have a higher proportion of students of color. But which would share in Mr. Miller's concern. But, one other question, of the 30 schools that you surveyed, how many have waiting lists and how many have had to use the, the lottery system? Do you know?

Ms. Blanchette. We did not ask –

Mr. Appel. We do not know.

Chairman Riggs. Okay. I did not know if that might come up. Well, Ms. Blanchette, Ms. Ganson and Mr. Appel, thank you, very much, for appearing here this morning. I realize that your study is ongoing and we will look forward to any further conclusions and recommendations you may have for this Subcommittee between now and April of next year.

Ms. Blanchette. Thank you, Mr. Chairman.

Chairman Riggs. This panel of witnesses is excused. I call forward the second panel. As they come forward to take their seats at the witness table, I will introduce them and give a brief background. Mr. Robert Chase is the President of the National Education Association. He will discuss the NEA's five-year charter school initiative. As part of their initiative that involves six schools, the NEA provides technical assistance and curriculum development, student assessment and staff development, administration, budgeting, staff training and community outreach. Jeanne Allen is the Director of the Center for Education Reform. She will provide testimony on the establishment and operation of charter schools across the nation, specifically discussing what factors facilitate or impede the development of charter schools and I hope also Ms. Allen may be able to talk briefly about some of the work that the Center for Education Reform is trying to do with the District of Columbia public schools. Dr. Yvonne Chan is the Principal of the Vaughn Next Century Learning Center, a public charter school located in Pacoima, if I recall right, in the San Fernando Valley area of Los Angeles City. She will provide testimony on the award winning school there, the–again, Vaughn Learning Center. She is also hopefully going to address the issue of whether charter schools receive their fair share of Federal funding and she is going to be a fascinating witness and I hope, Dr. Chan, you will share with my colleagues today your experience and your frustration with the 3B's that led you, at least in part, to help establish the Vaughn Learning Center as a charter school. Mr. Richard Thompson is the President of the Charter Schools Development Corporation. CSDC is a nonprofit organization recently formed by a group of business, political and education leaders to improve K-12 education through the development of more charter schools. Jack Kemp, former colleague, former Secretary of HUD and the Republican Vice Presidential nominee last November as a co-chair of the corporation, the CSDC provides financing, administrative and technical support to charter schools that have a commitment to the highest standards. Mr. Thompson will testify on the CSDC initiatives and specifically, their efforts to assist in the development of charter schools here in Washington, D.C., which obviously could be a laboratory for the rest of the country and as well as in other States. And, I am told–she is here now–Ms. Sharon Johnson-Lewis who is Director of Research for Great City Schools and she will testify about the Great City Schools’ concerns and opposition to charter schools so we will definitely have an opposing view, at least that is what I am told–this one–we always welcome that. She is saying no but we will look forward to her testimony. We have–you have sort of arranged yourself in slightly different order than I introduced you but if it is agreeable to all concerned, I would like to proceed in this order, Mr. Chase, Ms. Allen, Dr. Chan, Mr. Thompson and Ms. Johnson-Lewis. All right, Mr. Chase, good morning. Thank you for being here. Thank you for waiting patiently through the first panel of testimony and we look forward to your testimony. You may proceed, sir.

Mr. Chase. Thank you, Mr. Chairman and Members of the Committee. My name is Bob Chase and I am the President of the National Education Association, an organization which represents 2.3 million teachers and other education employees in our nation's public, elementary, secondary, vocational and post secondary schools. And, I do appreciate, very much, the opportunity to share some thoughts with you this morning.

The NEA has had policies in place since 1993 in support of charter schools. We believe that charter schools can become a positive vehicle for reform within public schools depending on how they are developed, funded, structured and governed. More than two years ago, NEA introduced the Charter School Initiative, or the CSI, one of six major NEA school restructuring projects to which we are devoting a significant amount of time and resources.

Through CSI we are working with parents, school staff and community members throughout the country to lead technical, or lend technical assistance in the creation of quality public charter schools. Our CSI project has established five project sites located in Hawaii, California, Connecticut, Colorado and Arizona. Schools associated with CSI will serve as a source of creative and innovative ideas for NEA and its State affiliates, public policy makers and educators. Our cites are diverse, but they are driven by the central theme of enhanced student achievement, professional development for educators and community involvement. We have contracted with a team of researchers from UCLA who are currently documenting start up operations at the project sites and will be assessing academic progress as the schools develop.

We are planning the development of pilot projects to ensure that sharing of learning from these schools with other charter and mainstream schools will take place. We believe that when charter schools are created along the lines that our members have chosen, professional educators applying best practices and teaming with parents and community members, that they do indeed offer hope for positive changes within our public school system as a whole. More detailed information on CSI and individual sites is included as an appendix in our written statement.

Notwithstanding our own involvement in the charter arena through CSI, we have ongoing concerns about several aspects of charter schools that I would like to share with you this morning. NEA is concerned that the charter school movement may be attracting some whose intent in creating charter schools is not necessarily focused on creating quality public schools.

The recent Wall Street Journal article noted, and I quote, "There is a new strategy in the race to make money by managing public schools, the fast growing charter school movement." These entrepreneurs see particular potential in charter schools because of their deregulated nature. They employ profit making strategies that are based on keeping employee salaries as low as possible by hiring uncredentialed and inexperienced people. Are these strategies in keeping with what is in the best interest of children, especially when so many of these companies have no record in education? For profit companies are counting on policy makers to open the education market and use America's children as blue chips. Our children deserve better. Within this context of charter laws allowing for profit operations, we point to examples showing potential problems.

The Gaddie family, which once ran a proprietary school shut down by bankruptcy and Federal oversight investigators, was granted charters to run several schools in Arizona. The charters were revoked only after a public outcry about the company's past record. The Edison run Boston Renaissance Charter School has had numerous complaints from parents about below part class work and incompetent administration, adding that they felt they had no recourse when the school's Board of Trustees turned a deaf ear to their complaints. Accountability to the public should be at the core of any charter school plan as it is with our CSI sites. After all, charter schools receive State and local, as well as, Federal tax dollars.

Yet, not all charter laws require the charter schools’ programs conform to State or local academic standards. No law requires reporting of systematic baseline data on the academic achievement of students before enrolling in the charter schools so we cannot determine the progress, if any, for these children. Many charter laws do not require charter school students to take State assessments, thereby making it difficult to compare their achievements with students in other public schools. Researchers for the Hudson Institute noted in their 1996 report, and I quote, "Charter Schools in Action: What Have We Learned?" The report that is stronger on theory than practice when it comes to accountability and evaluation. There is a description of laws on charter schools.

The recent Federal charter study was inconclusive in determining whether all charter schools are providing a high standard of education or whether they have increased student achievement. NEA also has concerns about equity issues for charters. Studies have shown that while charter schools are serving large numbers of minority and low income students, these students may in fact in more segregated settings than they were in their traditional schools. Equity concerns around special needs students and charter schools are particularly key, given that preliminary research shows that many charters are not accepting or adequately dealing with the needs of special education or non-English speaking students.

The Disability Law Center which litigates special education matters in Massachusetts has heard from many parents across the State about concerns for their children with disabilities in charter schools. The Center has become concerned that a pattern is developing in Massachusetts with problems in admissions to charter schools and in the delivery of appropriate sources for children that are admitted. As public schools, no charter school should be allowed to deny admission or dilute services to children with disabilities. And, finally, let me address the Federal involvement in charter schools, which began in 1994. While the appropriation for this program has grown significantly over its short life span, we do not have detailed information at any level on how individual charter schools are raising students' achievement, providing equitable access and services and informing other public schools on positive reforms and innovation. Here, the U.S. Department of Education and Congress can take a lead in pressing for accountability and quality to the use of tax dollars.

Mr. Chairman and Members of the Committee, thank you again for the opportunity to present NEA's views on charter schools and detail our Charter School Initiative. Charter Schools will no doubt remain on the policy agendas of our States and the Federal government for some time to come. I believe it is important that policy makers continue to monitor them so that we may be able to retain the best of what they have to offer our public education system while rejecting that which would lower standards, lead to more student segregation and diminish public accountability. Thank you, very much.

Chairman Riggs. Thank you, Mr. Chase. I just wanted to ask you very quickly, do you have any idea how many charter schools are run and how many pupils are served by for profit companies since you mentioned that in your testimony?

Mr. Chase. I do not have that data with me but I am sure we can do some research and find out what we can for you.

Chairman Riggs. And, perhaps one of the other witnesses might know. Ms. Allen.

Ms. Allen. Thank you, Mr. Chairman. Thank you, Members of the Subcommittee. I appreciate being here before you this morning. In my testimony I have given a–away of examples, some anecdotes, some evidence about charter schools working around the country. Because all that is in there, I want to focus and just give you a glimpse of what is occurring based on research in a variety of States and, in fact, national research and based on our own experience with the vast majority of charter operators and resource centers around the country.

Before I do that, let me focus on a couple of things that I heard earlier discussed, one of them being one question that was raised about the involvement of nonprofits and the involvement of a network and other support mechanisms. And, I think one of the things that is important to understand is despite a very big lack of any profit motive, there are no less than 35 organizations of a nonprofit caliber working across this country on behalf of charter schools, working with legislators, working with the individual charter operators, working with each other and it is really something amazing to see these folks that are not necessarily commanded by any dues or association coming together on a regular basis and drawing in more and more people to try to grapple with many of the concerns you have raised. And, so, I just commend that to you because I think that is important that both on a national and State level there is a huge amount of work being done.

Some of the work being done from some of those groups have come in the form of surveys but also in the form of research and analyses on various charter schools. You have heard earlier, and it has been mentioned, the Hudson Study, the Department of Education Study; there have also been no less than eight State based studies of charter schools, some which my colleague, Mr. Chase, referred to earlier. And, in those studies, you find a rather different picture than I think what you just heard about charter schools and that is you find a picture of charter schools where parental involvement is up around the 95 percent level in areas of the country and areas in pockets and cities where parental involvement is almost an anomaly.

You also hear about things like the accelerated school in South Central LA where parental involvement at school meetings is 80 percent and parents spend more than 150 hours a month volunteering at the school. I am sure Yvonne Chan has similar things to tell you, given that accelerated school in LA like her school is also serving predominantly low income and children who were previously disenfranchised. And, I am focusing mainly, and as you will see from my testimony, on schools in areas that have basically disenfranchised public school students for a very, very long time.

Those schools around the country also find that charter school teachers are very, very engaged, highly satisfied and involved in everything from faculty councils to coming up with grading policies to curriculum, to policies skirting around and undergirding parental involvement in the school. They also take time out of their mornings, their afternoons, their evenings and their weekends to work with charter school students across the country. And, again, there is evidence of this in the reports in my testimony. One indication, for example, anecdotal though it may be, Massachusetts, for 399 teaching positions available statewide, charter schools in total had received 9,588 applications since 1995 for those teaching slots. We find that the vast majority of over 90 percent of teachers in charter schools, despite a lack of a requirement in most of the stronger law States, over 90 percent of teachers, in fact, are certified, despite the fact that there is not as required as 100 percent total in most of the stronger law States.

When I say strong laws I am talking about the 20 or so legislation, pieces of legislation and laws out there, out of the 30 that we count that really do allow for and encourage a wide latitude of autonomy as well as corresponding accountability in those schools. As you heard earlier, and as you know, charter schools are in a performance contract in any State that already has a State standard or requirement in place, requires those charter schools to pass the same muster as public schools. In other words, any accountability or standards or assessment requirement of a traditional public school in a State is expected of a charter school. If you are in Virginia, for example, where they have State standards just coming to be and Virginia came up with a charter law, that would apply as well.

If you are in Minnesota where there is not a statewide standard or assessment requirement, Minnesota schools, charter schools, therefore, would not have to qualify for that and I think that is a little bit of confusion out there in the public eye. I would also add that regarding special needs and at risk children, charter schools are serving well, if not over serving, children at risk and of special needs.

It is a fact, in public education reform that the people who are happy, the people who are well served and the people who are content are where they want to be. It is the children who are not being well served, again, in most of our urban areas and rural areas as well and some other questionable areas that are the ones who are being drawn to charter schools. Those are the folks that are unsatisfied. Those are the folks who tell the Public Agenda Foundation, one of the most respected survey and research foundations across this country, every year, that they are fed up with business as usual. They want a higher caliber of education. They want standards and accountability and that they feel that their children are being under served. You will not hear that from upper middle class suburban people living in Bethesda, Maryland, that are very, very happy with their schools.

You will hear it throughout children in Washington, D.C. and in Washington, D.C. there is a huge number of people in support of charter schools and very, very much interested in making sure this process has moved along quickly. So, I will add that because you raised that, Mr. Chairman, earlier. I would also add that in my testimony there are examples of no less than 30 schools where the evidence of success of student achievement is documented in a forthcoming charter school workbook that will be out within the next month from the Center for Education Reform.

We have also surveyed both the research studies out as well as individual schools and document where student successes are. Schools like the Canes School in Colorado where there is an eight to ten percent increase in math and reading scores in the first year. All of the schools in Colorado, the accelerated school, Yvonne Chan's schools, etc. That is out there for those schools who have actually been up and operating for the longest time. I think that it is important to recognize that when we talk about and think through this issue, and I commend you for having this hearing and the hearings you have been having because this is a very important issue. This is not a fad. This is not an add on. This truly is a part of American public education today and will remain so for the foreseeable future.

But, I think it is important to recognize that balance that I heard alluded to earlier between wanting to help at the Federal level and wanting to ensure accountability and autonomy. I think that a lot of the discussions about Federal programs, part of the problems are the impediments that some schools face. It is more of a mentality problem than a problem in law, although a stronger direction from Congress and certainly from the Department of Education that talks about money following a child, certainly would help that a bit and get them thinking differently. I would also suggest, though, that when you talk about charter schools and what they are offering, let us remember that the reason people are truly sweating blood and tears out there to try to get these schools open is for children because they do not think that there is a one size fits all, and I caution you against looking at this as a different system, as a separate system and recognize that charter kids are people too and whether or not you talk about diversion, I do not think a discussion about diversion of funds really has any place.

We are talking about public school children, a public school system, a growth of alternative schools, nothing different than what you have seen in the past from magnets or alternatives but you are talking about schools that are serving kids. You should use as a criteria if it serves a child, if it is serving the child well, and if it is doing something good. We should be helping and I think just as many horror stories as you heard discussed earlier by my colleague about charter schools, why do not you quadruple them or times those by 100 in public school systems where there is not a performance contract and the accountability.

Finally, I would just direct you to my conclusions and my recommendations to the Committee which underscore the importance of the charter school Federal grant program you have, but I would also encourage you to look very seriously at making sure that money that flows to those States that truly allow for a plentiful number of autonomous public schools. There are States rushing to the table to pass laws just to get their piece of the money. Lots of States do that on lots of programs. I am not against it. But, what I am saying is that you have a lot of money going to schools that are not charter schools but are charter in name only.

So, I think that it is important to focus on that. I think it is also important to recognize that the Department of Education or any other entity does not need 10 percent of the money allocated for research and activities. In fact, much of that money I think is being squandered and could have been used on text books and teacher training and things this year had it not been allocated to the department and while they are doing some good things in terms of a national study and various events, they are having a hard time trying to figure out how to spend all the charter money allocated to them.

And, so, I commend you to that and some additional regulations about how I think the Office of Civil Rights or the Department of Education is getting involved erroneously in charter debates and I would be happy to answer any questions you have. Thank you.

Chairman Riggs. Thank you, very much, Ms. Allen. You covered a lot of ground very succinctly there. We look forward to the question and answer, give and take that will follow the testimony. Dr. Chan.

Dr. Chan. Good afternoon. Mr. Riggs, nice seeing you again and good afternoon Members of the Committee. It is nice to be here, even with the red eyes. It is really nice to have a chance to share with you what my teachers and parents and the families have done, we came together in the last four years and turned a very, very low achieving school to high achieving school in a high involvement school.

Now, my school, called the Vaughn Street School–that was its old name–is located in Pacoima Empowerment Zone, we serve 1200 students, been there for 48 years in the Los Angeles Unified School District. Of the 1200 students, 95 percent Hispanic, balance African American students, very overcrowded, 900 limited English proficient students, three times the size of many schools and 100 percent free lunch. Income, family of four, 11,000, give or take, living in garages and so forth. Now, did we have gifted kids? Zero. Why? They ride the busses to the magnet schools. –is so good, but–was not in my neighborhood. Did we have special kids who really need services beyond inclusion? Zero.

Why? No space, no program, no personnel. Who would sacrifice a room that you can put 35 bodies in there for the seven or eight autistic or trainable retarded kids? No. –right out of college. No training. Not a class of teacher education. Oh, I have got plenty. I have got 18 of them. That is a public school. We have been there for 40 years, learned to be hopeless and helpless with the lowest test scores in achievement and moral. Everything else, right in the heart of a big inner city. Now, my job, I went through the district for many years, 20 some years, went through the rank, principal and so forth. My job was not the 3R's and I know–you want me to say that my job was not the 3R's.

My job, I call it the 3B's–. I make sure that the kids get on the right busses with desegregation. That is it. –did not know how to read. That is not my problem. I want to make sure they get on the right busses. Secondly, good idea, parent, but, you cannot do that. Thirdly, I learn all the regulations, all the rules, all the policies to cover my behind. Okay? I did not use that word. Now, but what really, really bothered me is as a fifth generation immigrant who came to this country in–and bless President Kennedy, I got my–the public education. We are–I did not pay a dime. UCLA doctorate degree. But, where in the heck –are dreams for these kids? 1200 beautiful kids.

When I know darn well that the best I could have done was just warehouse them. 1200 kids, many have no future and some–tomorrow. Now, how shameful could that be? 1993 was a good year, good year. And, it came, this charter school law because the vulture–pass. You see, it sneaked right through. Well, for us, great. It is a tool. It is a tool for us, why, because it licenses us a dream. It allows us–this call to make waivers. You do not have to ask for forgiveness if you want to get something done. You do not have to do the—anymore–accountability on. Excuses out, performance in. And, just like the little engine that could, where we just chuga, chuga, chuga, chuga along for the last four years and we together accomplished things. The journey was not easy.

But, in the very beginning, as soon as we said that we are independent, 4th of July, okay, 1776–guess what? All of a sudden we lost our legal status. IRS says you got to pay this, you got to do that. There are taxes here. We could not even open a bank account. And, we were a public school for 40 some years. How come all of a sudden we are less–because you want to do more for kids–but sacrifice among professionals. My teachers, custodians, everybody, did not take paychecks the first month and I mortgaged my house–push the envelope. I did not have a house when I first came to this country so give it back. What the heck. Now, but–we set up our credit and our baseline, the last four years, we have begun a good relationship with the district and union and where we are now, we are seeing the rainbow because you put up with all the rain. Now, what we have accomplished is our student achievement used to be the lowest. We rank number 1 among the whole cluster of schools in the neighborhood.

We became a California distinguished school last year and this year. The National Blue Ribbon School and Mr. Riggs, you promised my kids, we are coming, November 6, 7 and 8. 150 of us will be here, the Capitol, the birthplace of this American dream because my kids are gonna feel it and touch it and maybe, Mr. Martinez, if you have a chance, come and talk to my kids. I also, at this time, –limited English proficient students, they did transition to English very quickly by third grade, 103 gifted students and we brought home 89 handicapped students, even in the beginning with very little funding. We–special education and–and found a new way, a much better way to educate our students in the home school and the neighborhood school where the parents did not exist.

Class size reduction, the first in California, grades 1, 2 and 3. Brought in the bungalows, technology, 250 computers all wired up, Internet. But, the crack house that used to deal right next to us, we bulldozed it down and built 14 brand new classrooms with union wages as well as high school students who work and my parents who volunteer. Now, our kids go to school 37 more days and the kids in the neighborhood, teacher opportunity for staff development is excellent.

Beginning this year we are putting in place a competency base pay in addition to the one salary schedule. Our teachers do earn 12 percent higher salary and we do have 27 more dues paying members now than before creating a career ladder, one stop shop for all the services. We are in the process of building a community library that we never had in our neighborhood. And, I know there is a question about so great Vaughn, you did well. Yes, we intend to take this up to scale and it is happening. It is happening.

There are two other charter schools right next to us. The district is putting magnet schools next to us and the high schools move. We come together in applying for Goals 2000 and the district becomes a whole lot more accountable in terms of the services that we are purchasing as well as we ourselves set up, team for self monitoring, even self policing. So, to end, this opportunity to us means equal access to the kids, equal access that we never had before. It also means opportunities for those of us, the professionals, to stand behind our profession and our ethics and our code of professionalism when we first came to teaching. It also means choice within a public school for the parents. But, also, it means accountability for the entire system and I really hope Members, that you will help us and get behind these kids and be the Committee that could. Thank you.

Chairman Riggs. Thank you, very much, Dr. Chan, for your inspirational testimony. "The Committee that could"–we will try to remember that, I hope. Mr. Thompson.

Mr. Thompson. Thank you, Mr. Chairman. I do not know that we will ever approach "the Committee that could" at the Charter School Development Corporation but we are going to try to be the outfit that helps charter schools develop their facilities at least in that part of the program.

We appreciate the opportunity to come before the Subcommittee today to present our request for the Charter School Development Corporation, or CSDC–Fromm, Treasurer of CSDC is also present and will help me and assist in answering any questions that you might have. The nonprofit Charter School Development Corporation has been formed to improve K through 12 education through the development of charter schools. Our primary focus is to provide financing of the charter schools that have a commitment to educational excellence. While CSDC's primary focus is on securing private capital for charter schools, it always plays a catalyst role in charter school policy development.

This summer, in cooperation with the Charter Friends National Network, CSDC sponsored a nationwide Charter Schools Legislative Conversation among selected charter school policy experts via the Internet. Possible changes in Federal charter school grant programs were discussed. The summary of the conversation is appended to the testimony. Conversation was not intended to come to a consensus. Nevertheless, your Subcommittee might be interested in a number of the points raised by the participants. These include more correlation between the number of charter schools and the amount a State receives in charter school grant funds, use of the National Activity's Funds to include technical assistance and facilities financing and examination of Title I funding. Despite the previous comments of GAO, there are serious problems, particularly in the first year of Title I funding getting to charter schools.

Moreover, Congress should ensure that the DOE grants be given only to States who have charter school laws. The conversation will continue and provide a voice for those involved in the daily activities in charter school policy that are outside the beltway. We look forward to further dialogue with your Committee, particularly in light of your announcement this morning that there will be legislation forthcoming. Charter schools, providing the freedom and accountability have potential to renew American education, yet significant barriers do exist for the establishment of new schools. The primary one is financing for facilities.

Both the Hudson Institute Report released last month and the Department of Education, May 1997 Study of charter schools found facilities to be the gravest obstacles encountered by new charter schools. So, what do those schools do? Well, several schools rely upon loans from dedicated trustees, one of who is sitting next to me here who obviously believes so much in the schools that they mortgage their homes. Schools are located in strip malls, church basements, warehouses, abandoned K Mart buildings and even in an old coliseum we found one. Make shift facilities, which the Hudson Institute found to be "much less than adequate." These are examples of only fortuitous circumstances. The fact is that even with a charter, many schools never open due to the lack of facilities and I might add that in Chicago, of the 11 charters recently granted, only four schools opened because they didn't have a facility. Congressional enthusiasm for charter schools needs to be coupled with the action to help solve the facilities problem and your Subcommittee can help. Help is the operative word.

Charter schools should not look to the Federal government for the ultimate answer to the capital funding needs. The private sector is much more able to provide financing. The point is where Federal help is needed. The crucial point is to provide leverage to private capital for charter schools. Historically, the Federal government has facilitated financing for public interest enterprises such as housing, farming, college education and small businesses. These borrowers who have the limited resources and little or no financial history typically have difficulty obtaining loans. Accordingly, Federal action was justified in order to encourage targeted endeavors. The Federal role has taken different forms like the Farmers Home Administration, Farmer Mac, Fannie Mae and so forth.

Although there is usually some initial Federal funding of these institutions, most have become self-supporting. Charter schools, the cutting edge for revitalization of public education, may need similar Federal attention. CSDC proposes a study to help Congress determine if there is an appropriate role to stimulate capital for charter schools. The proposed study would assess the options for creating a streamlined system for financing the needs of charter schools. Because of the complexities of this market, with the different charter school laws and structures in every State, and the relatively newness of these educational institutions, we currently do not know what the optimum financing structure should be. Having said this let me tell you, our first priority in this endeavor is to provide a private solution to meeting the capital needs of charter schools. Capital needs that were once considered risky and unconventional are now, are marketably part of the norm. Congress should take advantage of the innovation in private capital markets to help meet charter school needs.

We recognize that the public sector is overextended and unable to incur sizable financial commitments. A long-term solution to charter school financing is to make private capital and investment the central component to the new system. Second, we place a high priority on the use of existing financial institutions and entities. We do not need to reinvent the wheel and our bias is to avoid doing so at all costs.

Numerous existing financial institutions may be able to play a role in the charter school financing market. The designing and grafting, what that role will take will take some time. We aim to work with those institutions to develop the realistic options for engaging the financing industry in the provision of capital to this new market.

Lastly, we want to establish a financing structure that is self-sustaining, not operating on annual appropriations for Congress or annual grants from foundations. In the long term, and I understand–I underscore, in the long term, a successful financial mechanism must stand on its own two feet in the market. This is the only way we can achieve our mission. CSDC requests that your Subcommittee consider adding to the possible uses of the National Activity's Funds, a designated grant to study this issue.

The study would combine the knowledge and capital of capital markets and the business management of K through 12 schools. For the study to be most beneficial we would suggest that the Department of Education be asked to have the study performed by an entity that has the expertise in the following areas: fixed income markets; highly structured financial instruments; credit enhancement; government sponsored enterprises; securitization; State charter school laws and chartering authorities; experience with charter school operators in management. In lieu of the Federal contracting process, CSDC is prepared and able to begin this study immediately. We have the necessary expertise and could find the means to launch facility financing for charter schools quickly.

Thank you, very much, Mr. Chairman, and Members of the Committee for the opportunity to make this request.

Chairman Riggs. Thank you, Mr. Thompson. Ms. Johnson-Lewis.

Ms. Johnson-Lewis. Thank you. Good afternoon, Mr. Chairman Riggs and Members of the Subcommittee. My name is Sharon Lewis and I am currently the Director of Research for the Council of the Great City Schools. Many of you know that the Council of the Great City Schools is a coalition of the nation's largest urban schools.

However, prior to my joining the Council last May; I was the Assistant Superintendent for Research Evaluation and School Reform for Detroit Public Schools. One of my responsibilities was to develop the charter school application process, to review applications and to give initial approval of those applications before submission to the Board.

Detroit Public Schools is the only school district in the State of Michigan that grants charters. Based on that experience, I feel quite comfortable expressing the Council's cautious support, Mr. Chairman, of the limited number of pubic charter school demonstrations. In my position I had the unique experience of authorizing the charter for two schools. Both schools were extremely good. Both schools had high-test scores. We did require our schools to take the State assessment test and also the assessment that was given by the districts. So, both schools had high-test scores, both schools had zero drop out rates and both schools had high attendance and extremely good parental involvement.

The per pupil income of those schools went from 2,000, which was what they were charging as an annual tuition to approximately $6,000 per pupil. It should be noted that with that increase in funding came a different type of student. Both of those schools were 100 percent black. Both of those schools serviced poor children. However, once they became public schools, then the type of students they received differed significantly. Those students tended to come from homes that were not as supportive of the homes that those students were previously from. They were all of a sudden faced with students who brought weapons to schools, with students who had a greater need for psychological and social work services than ever before. They had not had those problems before. I remember sitting in my office when I received a telephone call from the administrator of one of the schools that said, "What do I do if I suspect that a student has a gun in the school? How should I handle this?" It was not something that she had handled before even though she had been an administrator for 20 years in that facility.

Public school students are eligible for the same support services as others–school students. However, it is often very difficult to provide those services of psychological services and social work to smaller numbers of students and that is a big problem with many of the public charter schools that currently exist. I am reminded of a parent who called me because her child was a special education student and she wanted to enroll it in the charter school and unfortunately, that charter school did not have those resources. She asked me what to do and so we had so many schools in Detroit, I could easily pinpoint the appropriate school for her child. We would also like to highlight that as a public charter school, that schools serves as a local education agency of one school and therefore, it is possible that that school could receive Federal funding that if it were a part of that larger school district, it would not receive.

Let me give you an example. It is possible that a charter school has a lower poverty rate than the larger district for which it is geographically located. If that school was a part of that larger public school, then it would not receive funding, Federal funding. Thereby, we feel that those funds would be diverted from a higher poverty school of students who would have a greater need in that same geographic area.

One of the criteria that we had for chartering schools in Detroit Public Schools is that it needed to bring added value. We needed to see that we could learn from that school. We wanted to make sure that our goal was continued improvement and that if we chartered schools, these schools would benefit us. I remember receiving an application about a public school that had an emphasis on math and science at the elementary level.

They were using a curriculum from a publisher that I was not aware of. I read the application; I was excited about it. I had worked through the process of making sure that the building facility was licensed by the State of Michigan to be a K-12 facility and the last step of my application process was always an on-sight visit. As a part of the on-sight visit, I became more and more excited as I heard about this curriculum that was indeed geared to improve math and science at the lower level and it had great success. Being a teacher, a former educator myself, you always want to look at textbooks because, again, I thought perhaps this was a textbook that we could eventually use in Detroit Public Schools if it had been so successful. Also being an educator, you tend to look at the teacher’s guide and not the general textbook because you want to know what hints are given to teachers.

I was very surprised when I learned that all of the examples and everything in that textbook was religious based. It was a religious curriculum. Needless to say, that school was denied an application for charter. There is a place for public charter schools as a demonstration of educational innovations and creativity but we, as a part of the Council of Great City Schools, recommend that we proceed with caution and that we collect the necessary objective information before we proceed. When we look at some of the reports such as the May 1997 by the U.S. Department of Education, we are surprised that they constantly compare the percent of poor students to the State average. That comparison would be more appropriate if it was to the comparison of the geographic location of that public school. When I looked at Michigan, I saw that they said that the average poverty rate was about 30 percent.

Well, in Detroit it is closer to 70 percent. Someone it depends on how you compare it, you get a different type of reading. We would also say that you would go further than just identifying the number and percents of students who were disabled and are LEP, but you would ask what type of support services are provided for those students, how often are they provided and who does the providing. We would also ask that you select a random sample of parents who leave the charter schools and talk to them because I often talk to parents who left charter schools. Everyone does not find it a safe haven and so we recommend that if you do a study of charter schools that the study is more complete. In summary, we do believe that there is room for innovative charter schools as a part of the public school movement but we recommend that you proceed with caution. That concludes my recommendations, Mr. Chairman.

Chairman Riggs. Thank you, very much, Ms. Johnson-Lewis, and I'll take cautious afford over opposition any day of the week.

I do want to point out that according to the Hudson Institute Report, 61 of the 73 charter schools in Michigan were chartered by an institution of higher education, Central Michigan University, I believe.

Ms. Johnson-Lewis. That is correct.

Chairman Riggs. Seven of the 73 chartered by intermediate school districts and only four of the 73 chartered by local school district and that would include apparently the two schools that you were instrumental in helping to charter. Please, go ahead.

Ms. Johnson-Lewis. However, the other two schools, although it is chartered by a public school, it is a private institution near the Edison Foundation Schools–through a public school institution so it is a little different.

Chairman Riggs. Very good. And, I believe that was actually a situation that Mr. Payne brought to the attention of the Committee at one of our earlier hearings and we are happy to look at further, too. Now, speaking of cautious support, I have to tell Mr. Chase that his support of charter schools sounds downright tepid. I notice that there has been a, sort of a change since we last chatted, Mr. Chase, in my office about charter schools. Perhaps I –

Mr. Chase. I do not think, sir, that, one, it should be characterized as tepid or that there is a change. I think cautious approach to this is very, very important. One of the things that I have been struck by this morning is that much of the information that has been shared with the Committee is anecdotal in nature. I think it is not necessarily the smartest thing in the world to do to continue an approach, reform and restructuring efforts like this based on anecdotal information. Just as I can give you terrific accounts of some terrific things that are happening in charter schools, I can give terrific accounts of terrific things that are happening in public schools and I can also give you anecdotal information about negative things that are happening in public schools, regular public schools as I can in charter schools. So, anecdotal information, I think, should never be the basis upon which important and significant decisions are made. Rather, I think it is much more important that we look at good quality research in determining what should be done which is what I tried to indicate in the testimony that I provided to the Committee. I would also say that we are, in fact, moving forward with our charter school initiative and want to see it succeed.

Chairman Riggs. Mr. Chase, what is your time line for your initiative?

Mr. Chase. There will be four up and running this year and it is hoped that the additional two will be up and running next year. The ones that are currently up and running include ones in Hawaii, one in Colorado Springs, one in Connecticut and one soon to be up and running in San Diego. The other two, we hope, will be on line next year and we will be looking at further expansion of these in the years to come and next year. In my testimony and as I indicated when we had a chance to talk privately, sir, we have employed a team of researchers from UCLA to work with us from the very beginning here so that, in fact, when we look at charter schools we will be basing our information and our assessment of charter schools on good data that is research based from the very beginning rather than data that is anecdotal and I think that that makes an important difference.

I am in no way saying that we should be so slow in moving in charter schools that it would hamper improvement by any stretch of the imagination at all. But, at the same token, we have gone through now approximately 14 years of school renewal and school reform projects since the Nation at Risk was issued and many of those, a school–and school reform ideas have proven to be unsuccessful. They were jumped on with great furor by lots of people at the very beginning only to be proven not to have been beneficial. I do not want that to happen here. I want these to be positive experiences. We want them to work. We want them to be based on solid experiences, not on decisions that are anecdotal in nature and I could certainly spend lots of time talking with you about specific issues and giving lots of anecdotal information about some of the things that have not been as positive as well as those that have been positive in this movement.

Chairman Riggs. Well, we will have an opportunity to chat more, both today and in the future, but, let me, let me just ask you because I want to make sure I am clear on this. I mean, some of the anecdotal information or some of the examples that you might sight are of the very same problems that affect our public schools as well.

Mr. Chase. Absolutely.

Chairman Riggs. What I–and, you mentioned, I think, briefly, or alluded rather, to the fact that there have been some concerns about charter schools teaching all kids or accepting all kids and teaching kids with learning disabilities and I want to note for the record that I share those very concerns, but I guess, I guess my real question would be, do you feel, bottom line here, that a public school that is not performing up to par should be shut as a charter school can be?

Mr. Chase. I think if a public school that is not performing up to par does not make the necessary improvements that should be made, should they be shut down and reconstituted? The answer to that is yes. That is nothing new. We have been saying that for a long time. Schools are just to serve children and to provide children with adequate educational opportunity. If they are not doing that then they should be–actions should be taken to help improve those schools and make them work and if that does not work, then yes.

Chairman Riggs. Mr. Chase, excuse me. You say–I say shut; I mean closed permanently and you say, it sounds like closed temporarily and then reconstituted, whatever that means.

Mr. Chase. It depends upon the situation. I mean, I do not think anybody should say, shut down something permanently if we are looking at the possibility of altering the way it is set up or run and so on, then reopened, then that is a step in the right direction. Some of the charter schools that we are talking about right now are charter schools that have been reconstituted schools and they are in the public domain. So, I think we have to be careful, sir, when we, when we use those kinds of terms. When I indicated to you that–or you indicated to me, rather, a couple of minutes ago that some of the concerns that I have expressed as it relates to some charter schools are the same concerns that we would have as it relates to some public schools and I responded yes. I would say that any kind of reform or restructuring effort that we put forth and put a great deal of time, effort and energy in, should not be reform efforts that are going to replicate that which already exist. If the same problems exist in some new charter schools, then we need to see why and not replicate the problems that might exist in public schools. And, on the question of, of those who are in our schools and making sure that they are, in fact, inclusionary of all students, I think we have to be careful of the questions that are out there, or the data that is out there right now and–the information. If we say that X amount of students who are in charter schools are students with special needs, students of color or whatever the case may be, we need to just aggregate that information and see what we need as to whether or not that is across the board in charter schools or if that is in one, two or three charter schools that may have been created for specific reasons to meet the needs of specific students.

Chairman Riggs. Well, let me ask you, Mr. Chase, and Ms. Johnson-Lewis, as I conclude this round and I have other questions for the witnesses but I want to yield to my colleagues first and then if additional time is available, pursue those questions. I just want to establish, though, that there is a difference between charter schools and traditional schools in the area of accountability. It is rare, to put it mildly, that a traditional school would be closed for below par performance, or for that matter, incompetent administration, but the two problems probably go hand in hand. But, in fact, it is inherent in charter schools. The charter of in their establishment that the, that a charter school can be closed for those very same reasons. So, do you, Mr. Chase –

Mr. Chase. Maybe–in that but that is not necessarily the history that we have seen. We have not; we have not been along long enough to see whether or not that, in fact, is the case. It may say that in documentation but when we look at processes of assessment that are in place, then what the accountability measures will be. They are very unclear and fluctuate widely.

Ms. Johnson-Lewis. –so that if a school was not achieving it, it could be closed. But, I would like to say that–and that my colleague–that is becoming quite popular. They have reconstituted schools in Chicago most recently. I know in Detroit Public Schools that is a part of their new union agreement–what we mean by reconstitution, it's not always possible to close a school and keep a school closed. It is a neighborhood school and it serves those students in the neighborhood so it is necessary to keep the school open but what is possible is to remove those staff from that school and to reconstitute that staff with a new, a new principal, new teachers, new support services and that is what he meant when he said reconstituted. And, we do now have a number of school districts, unfortunately, I cannot recall them off the top of my head, who were not reconstituted schools–Baltimore was the other one that also does. So, it is fight, fight, fight.

Chairman Riggs. Mr. Martinez.

Mr. Martinez. Thank you, Mr. Chairman. I think it would be awfully difficult to close a public school but it would not be as difficult to close a new school whose transfer students from those public schools to that other public school that is now a charter public school. We have had–Mr. Chase, you are familiar with what happened in Richmond, are you not?

Mr. Chase. Yes.

Mr. Martinez. There is a good example of the State having to take over a school because it had really gone to pot. I mean, there was all kinds of problems there. Based on a Superintendent of Schools who believed the panacea to reimprove public education was choice and–remember that?

Mr. Chase. Oh, I sure do.

Mr. Martinez. And, it fell right through the floor. So, I think the question is not really a fair one. You think public schools should be closed the same as a charter school? Charter school is an experiment, it is a new product, it has taken on the challenge of producing better results than the private school does and that is why the parents send their kids there. If they do not then they are receiving the funds. In the case of the school in Detroit, I believe it was, private school receiving $2,000 per student to educate and when they went charter they received $6,000?

Ms. Johnson-Lewis. That is right.

Mr. Martinez. So, you see, that is, that is taxpayer's dollars and I say where taxpayer's dollars are being used, accountability, accountability, accountability. The easiest way for something to go wrong is to know whether they are not being monitored, they are not being held accountable. You do not hold anybody accountable; they are going to do as they darn well please. That is just a, a fact of nature. Let me, let me–because I, like you, I am really concerned in this whole charter school experiment, the idea of accountability because all we hear about is the flexibility that they have, the waivers they have from Federal laws and State laws that–and that makes sure that they are going to do certain things like serve individuals with disabilities and that they are going to serve low income and they are going to be integrated. You mentioned in your testimony that in certain areas, there is almost a segregation already in that half the schools in Minnesota, the first charter school area, 20 percent–or half the schools, only 20 percent–enroll 20 percent minority of more people of color and in the other half, 60 percent. You know, that is similar to what they have in–when we considered segregated schools before.

Mr. Chase. That is right. That is why I referenced, sir, the importance of the data that is there. If, in fact, we look at the total number of students who are enrolled in charter schools right now and just say X percent is made up of students who are low income, minority students, or students with special needs, without–that the information does not really provide us with the kind of data we need on a school by school basis and it is particularly important, if we are going to look at that and make sure that we are dealing with making sure that schools are accessible, charter schools, to all students, then we need to that information, that data, in order to make that kind of a decision.

Mr. Martinez. There is earlier–I think you mentioned in your testimony which gives me problems, too, is the for profit public school. My concept of public school is that it is not for profit. If there is a profit–if there is money there that is an excess of what you need to actually educate the child, then I would think that you would put what would be considered profit if you were a public school, if you are truly a public school, back into the system to improve the education of those children. For profit indicates that it will go into somebody's pocket.

Mr. Chase. I would concur with your feelings on that.

Mr. Martinez. You know, this thing can raise a lot of demons unless we are very cautious and very careful. If the whole concept of charter schools is to set a guideline or a standard by which public schools can improve themselves because they are in competition with the charter schools, that is one thing and I would firmly be an advocate of that. But where we–that says, a law firm in Detroit charged $10,000 for preparing a charter application. Here again, I said, every time we get a new innovative idea, somebody learns and finds out how to make money on it, associations, national associations of start up and somebody is getting a salary there. And, even though you simplify the project, the one thing in your testimony, you said that the school that you visited and that you found, they were actually–the curriculum was biblical based, that you–did I understand you right that you say you did not or you revoked their charter?

Ms. Johnson-Lewis. I did not charter. I did not recommend.

Mr. Martinez. So, they did not get a charter?

Ms. Johnson-Lewis. No.

Mr. Martinez. Well, I am glad of that. Let me ask you this, the charter school that was a private school that went charter and then all of a sudden it started to the problems that public schools have had like the children who did not have good parental supervision at home and came to school with weapons and stuff. Did that not create a lot of the same problems that you have in the public schools that we are trying to deal with and correct so that kids can get a good education? And, were they able to maintain any kind of a level of quality education in an atmosphere like that?

Ms. Johnson-Lewis. In these two schools, they were. They–as I said, they had a very committed staff–and we continued the dialogue–of the resources that they needed –

Mr. Martinez. Well, that is good because a lot of it is the dedication of the staff. I can remember when I was a kid going to school in East LA, in a pretty bad neighborhood, and there were teachers who did not care and there were teachers who were dedicated and the teachers that were dedicated made a difference in our lives and some of them were not afraid to use a little strong arm to make us understand we were there to learn. And, I was a beneficiary of some of that and so I think that, that is all right. But, I know that, that we need to improve even those situations in the schools and, like I said, charter schools are not going to be a panacea for everything and I think you have found that out. I think in your testimony, I do not know if you have any written testimony, I do not know if you gave it in your oral testimony, but I want to repeat this if you did and I missed it; a lot of the charters merely for the sake of providing an alternative choice does not address the issue of instruction, quality and performance which is central to improve public school. I agree with you 100 percent. And, so, when we get all excited about this, we have to remember that just an alternative choice does not provide quality education for all children. Thank you, Mr. Chairman.

Chairman Riggs. Thank you, Mr. Martinez. I am told that Mr. Chase's time is running short and he may have to leave within about 15 minutes so I just want to alert my colleagues and I want to say to my good friend, Mr. Martinez, I personally believe charter schools would not exist if there was not a demand on the part of parents and consumers, parents and guardians for more consumer choice in pubic education. Mr. Scott.

Mr. Scott. Mr. Chairman, Mr. Martinez, as you know, Ms. Johnson-Lewis testified that there are people leaving charter schools, parents leaving charter schools. There is a demand for anything that is new that promises and has a promise of great hope. The disillusion that comes afterwards because they are just like anybody else, is what is really the –

Chairman Riggs. I appreciate the gentleman's comments. I want to just mention to him, to guard against anecdotal evidence, which Mr. Chase had just admonished to Committee to be very careful. Mr. Scott.

Mr. Scott. Thank you, Mr. Chairman. Mrs. Chan, did I understand you to say that you were able to pay your teachers more than the other teachers?

Dr. Chan. That is correct.

Mr. Scott. How do you–obviously the teachers at your school have a more challenging job than some of the others. How do you select your teachers?

Dr. Chan. We select our teachers using Los Angeles Unified School District qualification but up it, up it by one year. That means, for example, in Los Angeles Unified, they require a teacher without a clear credential five years to do it and six units a year. Our criteria is nine units per year and four years to do it.

Mr. Scott. I would assume that you would be selecting them more on more than just their resume because the people that teach in these kinds of schools have to have more skills than you can read on a resume.

Dr. Chan. Correct. About a dozen of them came from district schools and we pay them, you know, more. And, we actually liberated them from the district schools with master degrees.

Mr. Scott. Now, are there certain skills you look for?

Dr. Chan. Yes. We certainly look for skills where a teacher is definitely coming–the profession is not a clock-in/clock-out job.

Mr. Scott. And, you cannot read that on a resume?

Dr. Chan. No. Therefore, we did a lot of track record, tracking, calling the principals before, whom they know, and we have applications that are quite thick so we, we really had a good chance of, you know, screening, as well as basically, we are looking at a number of areas; assisting, technology, working with handicapped students, working with the diverse, you know, group, as well as the fact that can you put these anecdotes that Mr. Chase is talking about, is really beginning to spread it and take it to scale. Can you really make a systemic change?

Mr. Scott. Thank you. Ms. Johnson-Lewis, if you went through the process of how you were selecting a particular school, once a school is selected and is not working out, how long does it take to figure out that the school is not teaching children? Although the application looked good, if it is just not working out, it is good on paper, but it is–how long does it take to figure that out and do something about it?

Ms. Johnson-Lewis. Our process was not that far along. I think we have only–this is our third year of chartering schools.

Chairman Riggs. Excuse me. Could you use the mic, please?

Ms. Johnson-Lewis. Our process was not that far along. We are only in–this would be the third year of our chartering schools, so it would be too soon to say that a school is not working.

Mr. Scott. So, a school, a bad school could kind of work along for three years without getting, what do you call it, reconstituted?

Ms. Johnson-Lewis. You are speaking now of charter schools?

Mr. Scott. Right.

Ms. Johnson-Lewis. Okay. The charter school would not necessarily be reconstituted. It would probably be closed and the minimum time on our application, I recommended a minimum time of three years even though some of them would try to come in with a one-year application process and I felt that that did not give them the security that they needed. They needed a minimum of a three-year security blanket. And, we receive annual reports from those schools, so, we were always aware of the progress that they were making.

Mr. Scott. Now, do you–in all of these charter schools, what oversight is there to find racial discrimination or discrimination against disabled students? What oversight–how are you able to detect that if it is going on in a charter school?

Ms. Johnson-Lewis. Well, of course, the charter school must follow the same State law as the traditional public school so, the method of oversight would be a complaint from the parent or from the student and it would follow first. It would go to the school. If they did not receive any recourse to the school, typically they would call me and I would refer them back to the Board of Education of that school and once they worked with the Board, if they were still unhappy then they would come to me and I would have conversation with that school. But, typically we try to–we stayed out of those types of decisions. It was that school staff and that school board who makes those kinds of decisions.

Mr. Scott. Now, do the charter schools have the ability to kick disabled students out of the school?

Ms. Johnson-Lewis. No. They must follow the same State laws as any traditional public school.

Mr. Scott. Mr. Chase, do you find any discrimination against disabled children, particularly if it is for one of these for profit organizations, it would be a great profit incentive to –

Mr. Chase. Well, it depends on how you want to describe that. Let me just indicate that there have been instances where there have been, particularly in Massachusetts where the Massachusetts Department of Education has allowed charter schools to encourage parents to waive all their rights under special Ed laws so that it is an inclusive setting. Those kinds of things are potentially problematical and it was just recently that the Department of Education, the Offices of Civil Rights, found that the Renaissance School, which is a charter school in Boston, in fact, was not providing the kinds of services that are required under law for special Ed students. And, in addition to that, it depends upon the number of students who are special Ed students who would be initially accepted into a charter school. So, there are all kinds of ways to perhaps get around some of the requirements that might be there. I do want to hesitate to say, or rather hasten to say, that that does not mean, and I am not by any means, trying to indicate that all or the majority of existing charter schools are in any way attempting to not live up to the requirements of the law. I am just saying that there are some difficulties in some situations that have to be watched very, very carefully.

Chairman Riggs. Thank you, Mr. Scott. Mr. Chase, what is your time line like because I know Mr. Owens wants to pose questions to you but Mr. Roemer is next in the order?

Mr. Chase. I do have an appointment in about 15 minutes, sir.

Chairman Riggs. Okay. Mr. Roemer and then to Mr. Owens and then Mr. Payne.

Mr. Roemer. Thank you, Mr. Chairman. I once again want to thank the panel. It is not often times that we get a panel before Congress that is in agreement on an issue, whether that is cautious support, whether that is downright excitement, whether that is, as Ms. Johnson-Lewis said, I think she said she is very, very cautiously supportive of charter schools and I also appreciate Mr. Chase's advice to us, that with any idea that we have, not total reliance on anecdotal information, that we do not let either side use anecdotal information to either scuttle or completely support an idea, especially a new idea where we need help in the great concept that we have in this wonderful country of public schools. And, as I said before, I do not want to give up on one public school or one child that wants to go to a public school and we have too many parents that are giving up and that are feeling helpless and hopeless in this. Before I ask a couple questions, I just want to say to Mr. Thompson, I do not have time to engage you or Ms. Allen in some of your previous testimony about some of the problems that D.C. charter schools have had. I do want to say that I do want to work with you, in particular, on helping the Options charter school that I have visited, where they may run into some problems with the D.C. public school system, in whatever longitudinal data that we have been able to achieve. The Options school opened in 1990-91 and in the 52 students that they were able to locate, they had a 75 percent graduation rate with 100 percent highly at risk student. The graduation rate in the D.C. public schools for everybody is 56 percent. So, anecdotal or not, that school seems to be doing some things well and maybe only they can do it. Maybe it is not a system that we can replicate around the country, but if they are doing something to help kids, I want to help you help them.

Mr. Thompson. Well, thank you, very much. We would be happy to try to even replicate it within the District because I think it can be done there.

Mr. Roemer. And, again, we are talking about public school choice.

Mr. Thompson. Exactly.

Mr. Roemer. We are not talking about vouchers. I am not a supporter of vouchers. Let me say to Ms. Allen, how do you respond to the criticisms that many of us share, that the charter schools are not providing full access to students with disabilities. Are there some things that some schools in charter movement are doing better than others? Mr. Chase and Mr. Martinez have pointed out, anecdotally, a couple schools that are not doing well in these areas. What are the strong charter schools doing well that we can then admonish these charter schools that are not doing well and make sure that they do not bring the rest of these charter schools down?

Ms. Allen. I think that that is an excellent question and I think one of the things that we need to do to try to get the answer is recognize and think through how special education or special needs children are served in this country currently. For example, anecdotally or not, over 70 percent of black males in New York City make up what is characterized as the entire learning disabled population. Do we really believe that 70 percent of the learning disabled kids who happen to be black males in New York City are learning disabled? Do we really believe they are special Ed candidates or have they gone perhaps unrecognized, unnoticed and unserved? A charter school and a vast majority of charter schools are currently serving those same children in a typical traditional classroom setting. Why and how are they being hurt by it? No. What they are doing is catching them with their problems early on. They are trying to work with them with different kinds of curriculum methods. When I visited two years ago a Hartford public school, and this is very typical of what I have seen, particularly inner cities, and I was knocking on the door of a classroom which was locked even though the regulations said it could not be, I was introduced to a special Ed class, 15 children sitting around the table, the teacher. One was Down's Syndrome, several were LD, another one was in a wheelchair and this was their class. I mean, these children, if you look on paper, are being served. The Federal Department of Education if you gave them the names would say, yes, there is an IEP, they are being served, they are in a classroom, they have a qualified special Ed teacher, but what was happening? Nothing. One child was laying her head on the desk but yet they are being served. So, when we think about special Ed and special needs, let us remember that just because we have accountability on paper does not mean those children are being any better served than they could with a personalized attention, a performance contract and the kind of commitment coming out of those schools.

And, I would add that in–whether it is using John Hopkins Successful All or whether it is mainstreaming these children into traditional classrooms, in charter schools, right now, currently in public education, there is a disincentive to get children out of special ed. You are putting more and more kids into special Ed because there is incentive. You get more money for failure and less for success and that does not necessarily translate currently in the charter schools. So, to that I would say, do we have the objective data across the board? No. But, the studies, the State studies I cited earlier were not anecdotal.

We could define and discuss the definition of anecdotal all day long but when you do on site evaluations based from research institutions and universities and talk to kids and look at them and look at how they were when they came into the charter school and where their learning baseline is when they left charter schools, that is research based and I do take umbrage at that being called anecdotal.

Mr. Roemer. Well, let me ask one final question to Mr. Chase, and I want to be clear for the record, too, because a number of people have said that charter school legislation is a panacea or a silver bullet; I do not believe that. I think that this is just one idea that we should be evaluating. I think that you have to look at better student/teacher ratios in our schools, you have to look at early intervention, you have to look at schools, our great public school system serving–looking at the possibility of serving into the summertime and longer days. We have to look at a host of pushing the envelope kinds of ideas and moving down, even beyond kindergarten, into earlier and earlier time periods where children are learning phenomenal things now. I think that all these things will help our public school systems work better. Let me just finally conclude, Mr. Chase, by just saying to you, I applaud you. I know you are pushing the envelope in terms of starting charter schools as well, too. You have four or five, I think you said in your testimony, that you are going to do more than that. Share with the Committee how you insist on inclusiveness and access in these kinds of charter schools, too?

Mr. Chase. Let me indicate to you that our schools are being created by people who have come from teaching in public schools. They carry with a them a commitment to ensure that newly created charter schools represent the student population and the particular district in which these charter schools are being found. Several of them are located in inner city settings and do reflect the needs of the community in which they operate. We at NEA are helping to sponsor what we are calling future searches, which are community building, and the future planning process that ensures that all the stakeholders in the community have a voice in how the schools are developed and implemented at all sites.They are working not only to have a representative student body but a representative teaching staff as well and through outreach a recruitment of minority groups and also special needs students. One of the major components of all of the charter sites that we are working in is an absolutely essential community based component. That part of our assistance to these different sites that we are working with is absolutely crucial and it is through efforts such as that that we are attempting to ensure they are fully represented.

Mr. Roemer. Thank you and I again want to thank the panel for your very helpful testimony.

Chairman Riggs. And, I just ask very quickly a follow up to Mr. Roemer. Mr. Chase, are you going to do some sort of entrance examination or some sort of performance assessments so you will have a way of going back to your testimony of establishing baseline data with which you –

Mr. Chase. –coming from the current public schools in that district and the baseline data will already be available because they are coming from those public schools and are subject to the same kinds of assessment as will be the other schools within that district.

Chairman Riggs. I see. Mr. Owens.

Mr. Owens. Mr. Chairman, I too, want to thank the panelists. It has been a very productive panel. My question relates to critical mass and this whole business of what is anecdotal and not anecdotal also is involved and I want, in particular, to have Mr. Chase respond. I think there are about a little more than 86,000 public schools in the country now, traditional public schools?

Mr. Chase. Yes.

Mr. Owens. And, according to the OERI review recently, there are about 600 charter schools, maybe 800 charter schools by the end of the year. So, we are talking about 800 versus 86,000. Our first problem, and we are professionals here, and we are dealing with micro research–our first problem is that we should not be comparing the two without some attempt to get a critical mass. What would be a critical mass the critical mass would not be just in terms of numbers but also in terms of situation? Should not we have some charter schools, which are very much immersed in inner city education and–to very difficult disadvantaged children with difficulties in a city? Some of the rural areas, this whole business of disruptive children, should we have some charter schools that focus on that? You are always going to be at a disadvantage if you have 600 jewel or 600 potential situations where you can have those jewels or the majority of them will be jewel situations, compare them to 86,000 which has all kinds of problems. So, can we agree on some kind of critical mass we ought to be working forward, toward if we want to really have an experiment that can be evaluated and studied for the good of all, for the good of education reform? What should that critical mass be, 600 or 800 is going to drop off the radar screen. It is just not enough. So, we are we talking about 10 percent?

Mr. Chase. I do not know what the critical mass should be or whether we should look at it from the perspective of critical mass, sir. I do know that there are currently now among the 600 or 700 that exist, some that we would consider to be jewels and some that we would consider to be a lot less than jewels. So, just because of the fact –

Mr. Owens. The likelihood that they are going to produce

Mr. Chase. Well –

Mr. Owens. A selective situation. They are going to produce more jewels than 86,000.

Mr. Chase. Well, I think the fact is though, that there are examples of schools that have not performed well and charter schools that have failed and have gone out of business and what we need to do is learn from each of those. Any kind of reform activity that we are involved in within the public school sector should have, as its primary goal, in my opinion, the improvement of educational opportunities for kids. That is what they are about. If there are charter schools that can show us ways in which to improve educational opportunities for kids, it is not just that we need to replicate charter schools by creating additional charter schools, but we need to take a learning from those charter schools and apply them to schools that already exist in the public school setting. It seems to me that that is one of the great potential benefits here.

When we talk about deregulation, for example, one of the positive things about charter schools is the potential of deregulation, well, why is it that only charter schools should be deregulated. If, in fact, that is an aim and it makes things better, then why are not we talking about less regulations on all public schools, not just on charter schools. So, there are lessons that can be learned from the perspective of charter schools and the charter school movement that I think should be applied to all of our public schools and the critical mass may be not necessarily in creating tens of thousands of charter schools, but taking the learnings from those things that we know are positive whether they be charter schools or regular public schools and use those in improving all of our schools.

Mr. Owens. Ms. Allen, could you address the question?

Ms. Allen. Yeah. I think we have to remember also that–and you are right about critical mass– because the whole point of this is to help as many children as possible. The whole point of any reform should be obviously having child in mind and any reform that is not child centered and not focused specifically on the child is not something that should be on the table. But, even though 750 or so charter schools that are open now, serving a little over 150,000 students we estimate, are having an impact on how education is done and delivered in their districts. It still is not at critical mass but you have got to consider the first school was started in 1992, we are sitting in 1997; I think it is extraordinary for a movement so quick to have that kind of plentiful supply but when you see, for example, lancing the superintendent approach accompanied to come help him do something differently with his school because he says, "I do not want charter schools to take my kids away from me and I am going to do something differently."

When the Mesa Public Schools in Arizona takes out a full-page ad, historic, and the Arizona Republican says, "This September, come to Mesa Public Schools. We have got the best in the State", which arguably they apparently do. Mesa has 62 public schools, 27 charter schools. They are certainly being given their run for their money. They are advertising and doing things to attract kids.

Mr. Owens. Thank you. I just wanted–Mr. Thompson, on the available facilities.

Mr. Thompson. Yes, sir.

Mr. Owens. Do not you think we need a united effort to develop the centers for all schools and charter schools should not singled out. We have got a facility problem across the board and the private sector could do a great deal, I think, in terms of trying to solve the school facilities problems for all schools.

Mr. Thompson. No question that there needs to be huge national attention upon the school facilities. The difference, sir, is that charter schools are not entities of the State and they do not have bonding or they cannot go out and raise municipal bonds as can school districts. So, we have a situation where we have created –

Mr. Owens. Are charter schools or public schools –

Mr. Thompson. And, they are.

Mr. Owens. Responsibility for the capital budget is there as well as the operating budget, is it not?

Mr. Thompson. I am sorry, sir. In–for instance, the allocation in the District of Columbia, the law that the Congress passed was very progressive law for charter schools as a per pupil allocation based upon the operating budget. There are no funds for facilities in that allocation. The idea that charter schools have a means to raise money for facilities is something that we are just beginning to realize that they do not. And, it is a real terrible need that they need to be helped in some sort of manner.

Mr. Owens. This is true in most of the charter school laws?

Mr. Thompson. Yes, sir.

Mr. Owens. No provision for capital budget?

Mr. Thompson. Only in –

Mr. Owens. Start up budget?

Mr. Thompson. Only in Minnesota, this year was there a law passed where $450 per pupil is now available for students but other than that there are no facility financing for charter schools.

Mr. Owens. Mr. Chairman, I have one more minute –

Dr. Chan. Can I answer that?

Mr. Owens. I want to ask you another question about, you coming out of the public school system. Give us one or two examples of what the handcuffs are that you have on you, where you perceive or assume that you could not do certain things or was it real that you could not? This–or you could not apply your abilities and capabilities as you have with the charter schools?

Dr. Chan. The beauty, you are right the beauty is, I have been in both worlds. Okay? The old world and the new world of education. I will not trade it for anything. All right. An example is, has to deal with student standards. Okay? We have to have high student standards regardless, you know that I am in a poor neighborhood. The difficulty is that, you know, we have a great curriculum, we have all the high standards, but I just did not have the personnel to do it. You know, every 32 kids, they give me a John Doe and Mary Jane. The difference now we were able to –

Mr. Owens. Pick your own teachers? Is that what you are saying?

Dr. Chan. I am talking myself, too. Principal, teachers, everybody. Everybody is responsible for the kids' learning. All right. Another example is before you know, we are looking at services we let nursing time, you know, the head lice all over the place and on and on. Now, the thing is, we are so isolated, the school, you got to have your own team of psychologists, your own team of counselors, your own team of whatever. But, right now, the difference is we can collaborate. We put up $50,000, Title I money, by the way, and matched it with a neighborhood; neighborhood health services that does Medical billing. They–the nurse that I did not have. They–counselor, and also, we are able, with other charter schools, to have one counselor for drop out prevention, to knock on the same door because we are talking about the same family with two kids with needs, four kids with him, and five kids with him. Why three different counselors? But, now we are able to do that. –USDA for services, they are Federal. All big time for me because 100 percent free lunch. Well, not true, you know, I have five kids who did not qualify. Five. And, yet the system spent one-third of the budget, 80,000, to keep track of that five who did not qualify because you have to make everybody apply, you have to screen them, you have to issue the ticket, you have to count the ticket, you have to audit the ticket, you know, sort the ticket, you staple the ticket, on and on. Okay? Now, the differences are–we want universal feeding. It costs only 2,000 to feed the five so let us take the general fund and feed our five. The rest of the money goes back now and reinvest into a nutritionist, a health science teacher; the kids get more choices. Those are some specifics. And, these can be taken up to scale they are doing quite a number like this. Bless their hearts. You know, it is a big district. 300, 400 schools are coming right behind us.

Chairman Riggs. Thank you, Mr. Owens, very good question, and may I just follow up on Mr. Owens question and ask you, Dr. Chan, to provide the Committee with a list of the education laws or regulations that have been waived for your charter school, the Vaughn Learning Center, under California State law, the State education code and the Los Angeles Unified School District regulations. Would you be able to provide us with that list?

Dr. Chan. Can I provide you with a list?

Chairman Riggs. Yes.

Dr. Chan. Yes, I can. Certainly, I can send that to you.

Chairman Riggs. Thank you. Mr. Payne.

Mr. Payne. Thank you, very much. I wonder, Mr. Chairman has OERI come up with any evaluations? I first thought, you know, having come in and just saw the GAO report, but I see a report and the report is on the access of Federal funding and whether they are getting their share. Is there any, to your knowledge, any concrete reports regarding charter schools overall?

Chairman Riggs. Would the gentleman yield? Yes, sir, there is a first year report and I have in my hand, actually, the Executive Summary entitled "The Study of Charter Schools" done by OERI. I would be happy to share with the gentleman.

Mr. Payne. Okay. Because, as you are moving to expand this whole charter school experiment, I–once again, I have some real concerns, you know, about who is being served. There is no question that the frustration level of the failure of public education is so general that anything is going to be better in the minds of people. It is not surprising that so many African American students have applied because if you take general education, it is much worse for African Americans than the broader community; so therefore, you are going to find probably more interest. That is just natural. The question of private schools and charter schools, I would be interested in how students even know. We have charter schools in my city, in the State. This is the first year it came out and they started in September in New Jersey. I did not know maybe 15 or so. It was very quiet, though.

You know, there was not any real big announcement that this whole new thing was coming out, this thing called charter schools. It was sort of maybe whispered. Although it was a public initiative, the typical person that lives in the lowest income areas, the topic of community was not about charter schools. Because it was not, you know, information as is available to those who have the ears to listen or the ability to get it, and, so, it is not just as open and public schoolish as we hear here. That is just in New Jersey. Now, New Jersey may be–therefore, the other 49 States might all be great, but I will assume that it is going to be the same in other places. Instead, the whole question it is not surprising that in New York, 23,000 people applied for charter schools, although there were, you know a couple of thousand slots available because, you know, New York City's public schools system, they do not even have room for students. They are meeting in closets and Major Owens said, "In New York, we have some little problems", but, New York was the one that was highlighted and that is the only reason that I refer to them. And, also, you know, private schools have a very, very good record of graduation and one of the things that scares me about, you know, charter schools is that there is a–of vouchers where–the biggest proponents of charter schools so I get a little nervous.

But, as I indicated, they are here. Maybe it is the first step to the goal that many of my colleagues want in vouchers. So, my question is, in private schools, for example, the graduation rate is high but private schools have their right to eliminate those students who are not doing well so when the graduating classes are there, you have those who perform fairly well and then go on to higher education, and I would be interested in knowing about the charter schools. That is why I wanted some–and I–Major Owens said he looked at the report and it is–this first year one is very general. I want to see specifics about who starts in charter schools and who happens to get eliminated, because one way to ensure that your charter school is going to look good is if you weed out those that are not going to really make it because you will be like the private schools that have their right to do it.

Charter schools are not supposed to have the right to do it, but you can certainly do things to encourage people that this is really not your thing. You know, you might do better in your little local school and it is not all we thought it to be–to weed out those who may not come up with the anticipated outcome because anyone who goes in the charter schools certainly had the realization that the charter school is going to make everybody more intelligent, and, therefore, you have to try to be sure that you reach your goals. That is just because people are goal driven. And, so therefore, I have a lot–of I see an abandonment and I understand the charter schools in my city will have no more than 18 students or something; the typical class size in Newark is about 35 students. I suppose they are going to test higher, I guess. I would hope they would and I know they will because if they did not, it would really be convoluting.

But, you know, this whole answer to the failure of public education is to go the charter route, I think. In my opinion, the only reason I have reluctance with it is because I believe that it is not the way I think that, you know, although we are going to get four or five percent of the kids who will–or 10, whatever–I do not know what the overall goal is. We will maybe be able to do better in, especially in, those inner city areas, what is going to be left in the public schools is going–if you think the public schools are bad now, what do you expect them to be–even low income people have initiative, you know.

There are different–it is like purgatory, you know, there are those seven levels, I guess. That is what Dante said. The question of a poor person who has the ability to get the kid on a bus or pay the money to get them across town–as I mentioned, our city is very small, but it takes, to get to any of the charter schools from where I live, because I live in the low income part of Newark, it takes 30 minutes to get to the closest one. It is not going to be for people in that community. I do not care how nice you make it. And, so, this was an interesting anecdotal report from GAO and now I understand it better, why it is anecdotal? Because that is really what it was supposed to be.

I am looking for more and, so, I need to direct my information, my questions, to OERI and those people that can come up with some real data. Also, this–you are getting a lot of pretty good definition. I do not know; I have to go out and ask my supporters in the future, are they cautious supporters. I mean, does that mean you vote for me or not? You know, this new this is an interesting panel here, anecdotal reports and cautious supporters or whatever, so, it is interesting and I know, you know, new terminology escalation. When we used to increase the war, we escalate the war or prosecute even in the Persian Gulf thing. That was a new one. But, I do get concerns, too, and I get new definitions, you know downsizing and outsourcing. They all sound pretty good. What do they mean? They mean, you are fired, you are laid off. There is no job for you, but if you just took that word it does not sound so bad. Our company is doing what? We are outsourcing. Well, that is great. What is happening with the employment? We are downsizing but we are becoming more efficient. Of course, that means 20 percent of the–even our Federal government is great with reinventing government. What does that mean? 250,000 people lose their jobs. I mean, it is, it was a good term and it sounds great and we know terminology is great but downsizing, reinventing government that Al Gore led. I mean, my own Vice President. It was probably something that had to happen. They did not say we are going to just eliminate 250,000 jobs.

It was reinventing government, a new term, same as all. So, I just get concerned and I guess I am just so old. You know, grumpy old men have a hard way to change, you know. I think that the public school system is what made this country strong. I think that elitism, I think that separatism, I think that resegregation of course, you cannot, you cannot have segregation. It is the law of the land. New Jersey schools are more segregated now in 1997 than they were in 1954 when the Supreme Court said separate but equal is unconstitutional. We have a new thing in New Jersey; they are called thorough and efficient. That gets around separate but equal. Thorough and efficient means that every child is entitled to a thorough and efficient education, sort of like where you are, like Booker T. Washington. You know, put your bucket where you are. So, learn where you are. Therefore, separate but equal is constitutional as long as there is a thorough and an efficient. So, like I said, these terms get thrown around. It is interesting. As you can see, I am a skeptic. I really do not have a question. I just thought I wanted to make a few statements to throw it out to you and I am probably the only one here that is still the last hold out but I just think that we are banning the public school system.

The public school system is going to get worse. It is going to get so bad that no one is going to be able to go to it. If you are going to siphon off lower pockets of cash around there and over there for those who have the initiative, the ability, to get to them. Therefore, I do not think that we are dealing with the overall problem. But, in this country, we do not care too much about the mass because we are not going to need the masses. You know, if we throw away bottles, we can throw away people. We do not need them. As a matter of fact, what are going to do with these excess people that we do not have jobs for, for automation? I know the prison system is something–now they are getting to expensive for the prison–but they have new ways. You just do not get health care or food, so it might reduce the cost. But, it is just, I hope that one day I can be as enthusiastic and encouraged as all of my other colleagues in the House, but, at the present time I think that it is just going to damage the kids who need it the most because it is going to siphon off already under funded schools currently in urban areas like where I live.

Chairman Riggs. Thank you, Mr. Payne. And, may I also refer you, sir, to the Hudson Institute Study, entitled "Charter Schools–What Have We Learned", which I think Ms. Allen mentioned in her testimony. This is a report that is based on the findings of the first of a two-year study of U.S. charter schools and I will stipulate that we have had to rely a lot today on anecdotal evidence. That seems to be the recurring theme running through the hearing. The jury is not in yet on charter schools, but the Hudson Institute's fieldwork, and I quote, "consisted of site visits to 43 charter schools in seven States, comprising–and a gathering of substantial data of 35 of these schools." That is on top of the GAO's narrowly focused study on top of OERI and the Department of Education study and so far, the results have been pretty encouraging. In fact, one of the co-authors of that Hudson Institute Report, Bruno Manno, writing in the Washington Post recently, said, and I quote, "Surveys show that both teachers and families choose these schools for educational reasons. High academic standards, small classes, a focus on teaching and learning, educational philosophies that are closer to their own, and innovate approaches to instruction. Many accomplish what they do with less money than conventional district schools. Unlike other educational reform proposals, such as school vouchers, charter schools are not identified with any particular political ideology. They enjoy bipartisan support among elected officials at the local, State and national level and have won over parents of all political persuasions. They offer exciting choices for students, welcome professional opportunities for teachers and lifelong educators like Yvonne Chan, and educational progress for their communities and are genuinely a promising reform development of the States and the nations as they help the nation reinvent American education."

I just want to close by saying, particularly to Mr. Chase, that I personally believe that the public schools, when deregulated, can compete with the best private schools. You mentioned, Mr. Chase, in your comments, the Nation at Risk study, it is sort of a definitive study, now, what, 14, 15 years old and I would just mention and refer you, if you have not had a chance to pick it up yet, to the follow up study reclaiming the Nation at Risk which found, as you probably know, that decentralization and site based decision making were the two most important keys to real educational reform and improvement in America today. And, that is what this experiment is all about, deregulation and decentralization. I want to thank our witnesses. I want to give Ms. Allen and Dr. Chan, though, an opportunity to make any closing comments because some of the interaction was a little bit skewed. But, first, I

Mr. Chase. I am going to have to leave sir. It is –

Chairman Riggs. Okay. Thank you, Mr. Chase.

Mr. Chase. Thank you, very much.

Chairman Riggs. We appreciate you being here and look forward to working with you. Mr. Thompson, one quick question for you that I need to understand and that is, as you explore different financing mechanisms, what would the collateral, what type of collateral do you think would be used to provide private capital to charter schools for start up purposes?

Mr. Thompson. Yes, sir. That is a question that is obviously critical for the investor and it is twofold, clearly. One is the property itself. There would be a mortgage on the property and secondly, there is this stream of per pupil income that is coming in that Dr. Chan, in her case, apparently is able to save from the operating income enough in order to pay for the facility. I am not quite sure how your facility is –

Dr. Chan. That is public and private venture. Half and half.

Mr. Thompson. I see. Half and half. So, it would be that convincing investors that that stream of income from the school district is indeed going to be constant enough and be there so that they can rely upon a piece of that to pay the mortgage off or the facility.

Chairman Riggs. You say the school district but you mean from the charter school itself?

Mr. Thompson. Well, the charter school gets the per pupil allocation from the school district and so, yes, that is what I mean. I think what is missing in every case except as Mr. Owens pointed out for me in Minnesota, is there is no recognition in the State laws that charter schools need funding for facilities because it is not included in the per pupil allocation. The situation in the District of Columbia is where we are most familiar and as we know very well here, we have two billion dollars for maintenance and there is no way to pay for those kinds of facilities for charter schools other than to have some sort of unique sort of payment to the charter school for that purpose.

Chairman Riggs. So, you are talking about basically your organization becoming a mortgage broker or a mortgage banker for charter schools?

Mr. Thompson. To some extent, to be the facilitator, to create a conduit that takes, that goes to Wall Street, assures them that this is a solid enough investment where they can put their money into it and indeed be repaid. Yes, sir.

Chairman Riggs. That is an intriguing concept and I wish you well. And, I want to ask Dr. Chan and Jeanne Allen, that your–experience, has the start up of charter schools led to higher parental satisfaction and teacher satisfaction at these charter schools and does that, in turn, correlate with, here is the bottom line, an improvement in pupil performance. Dr. Chan, why don’t you go first?

Dr. Chan. In addition to satisfaction, you have to have the standards and accountability. So, when you are satisfied you are doing your job, you definitely want to do whatever you can to meet the standards. For example, when we were a million dollars over, we could have given ourselves a 30 percent raise. No. We decided to reduce class size. But, I would like to give up a parting and comforting thought for Mr. Payne, though, that since I work in minority schools–for you know, this is my fifth principalship for the last 15 years, it is our parents. You know, the best thing that they–they do not have the car, the language or whatever. But, they care. And, just a little bit of involvement, a little bit more advocacy, I mean, they go miles.

Advocacy can go miles. I mean, they can go faster than some of my parents. I mean, they can really rule the school over fast if they had the guts and they know what the battle is like. And, once we set up a government…that is very important. We have, under charter, you have to work with the parents and look at the governments and coach them and work with them. When the government is set up where it has that, –and so for us, a lot of them is–parents. And, there is no way you can lose. And, also, another thought for Ms. Lewis is, as a chartering authorizing agency or entity, you definitely have all the rights and all the expertise to read and know whether there is a good charter or not. And, if you can see that this has good standards, have a good goal, the curriculum and the personnel and the very equitable government and the parents are very involved, you approve it. If not, do not approve it. You do not approve it; there will not be bad charters.

Chairman Riggs. Ms. Allen.

Ms. Allen. I guess I would just like to say, Mr. Chairman, that I really do appreciate Congressman Payne's concerns and I think that the vast majority of people who support charter schools are very, very concerned about the same thing. But, I have also been at a number of charter school conferences, conference calls, you name it, and I am really always amazed at how many minority educators from cities like Newark are there and are trying to do something. In Newark itself and I was raised in a more affluent part of New Jersey, in Bergen County, and I had the advantage of a great public school education there. But, I am very familiar with Newark both personally and professionally and there are hoards of people in your district chomping at the bit to start charter schools if the Commissioner could approve them fast enough. And, from the Newark Public Housing Authority to people on Beverly Hall's own staff, they are fed up with the whole takeover and the whole effort there because they do not think they have been given the authority to do what they were taught and raised and certified to do. And, so, I think the frustration in educators that I am seeing is enormous and of the 13 charter schools in New Jersey that opened just this year, the vast majority are in cities like Jersey City and Hoboken and Newark and I think that any time you want some company to go around there, I would love to visit with you.

Chairman Riggs. Thank you, Ms. Allen. And, Ms. Allen, I am curious though, why what went on in Virginia? Why has Virginia not adopted a charter school law since, on the other hand, and sort of in the forefront of, pushing for higher standards and greater accountability in public education?

Ms. Allen. It was a bad offense and I think that very, very early on, they got hit because the South has been very problematic and there has been a lot of concerns like the ones Congressman Payne raised and I think that most people are not familiar with it, most people view it as segregation down there, and there has been a study committee appointed now to try to get to the bottom of that. And one of the things they are doing is visiting schools like those started by the Urban League and other minority groups to be able to bring that back in showcase in Virginia.

Chairman Riggs. Thank you. I thank our witnesses for their participation and I thank our audience for their attendance. And with that, the Subcommittee stands adjourned.

[Whereupon, at 1:30 p.m., the Subcommittee was adjourned.]