EDUCATION NOTEBOOK: 
Restoring Federalism in Education: The Charter State Option

October 20, 2006

More than four decades before No Child Left Behind, Senator Barry Goldwater of Arizona warned about the slippery slope of federal involvement in education: "Federal aid to education invariably means more federal control of education." Goldwater went on to lose the 1964 presidential election to Lyndon Johnson. And in 1965, Johnson signed into law the Elementary and Secondary Education Act, the foundation of today's federal education policy.

As Goldwater predicted, over time federal education funding has led to greater federal control of education. Federal influence reached new heights in 2002 with No Child Left Behind (NCLB), the eighth reauthorization of Johnson's Elementary and Secondary Education Act. In addition to increasing federal funding for K-12 education, NCLB created new federal requirements for student testing, teacher quality, and many other things.

This increase in federal power has caused lawmakers in Arizona and other states to ponder a question that probably would have occurred to the late Senator Goldwater: Can a state benefit by foregoing federal funding and opting-out of No Child Left Behind? In 2004, Arizona lawmakers proposed legislation to do just that. According to the National Council of State Legislatures, 21 states considered legislation critical of NCLB as of 2005. Seven states passed resolutions criticizing NCLB.

This week, the Phoenix-based Goldwater Institute published a new report examining Arizona's relationship in education with the federal government. Written by Krista Kafer (a former senior education policy analyst at The Heritage Foundation), the report examines how NCLB has affected Arizona's pre-existing standards and testing system. Kafer also considers Arizona lawmakers' dilemma over whether to opt out of NCLB.

As Kafer explains, Arizona already had a comprehensive student testing strategy before NCLB. Arizona schools administered both a criterion-referenced test (AIMS) to measure student performance against state-established academic standards and a nationally norm-referenced test (SAT-9) to measure whether students were making progress during the school year. Under the "AZ Learns" testing plan, schools were graded for their results on both tests. By placing new requirements on Arizona for student testing, NCLB has created what Kafer calls a "dual accountability system" that has made school performance measures more confusing.

Do the drawbacks of sticking with NCLB outweigh the benefits-namely, federal funding? According to Kafer, Arizona would risk losing $582 million in federal funding if it opted out of NCLB. Arizona taxpayers wouldn't want to leave $582 million in federal funding on the table. After all, Arizonians are paying federal taxes that fund the U.S. Department of Education, and they want to get that money back.

And so Kafer proposes an alternative strategy to return control to states and localities without risking federal funds: a "charter state" option. Just as some schools now create charter relationships with districts and thus become "charter schools," states could be given the choice to enter into a chartering agreement with the U.S. Department of Education. Under these agreements, states would receive greater freedom and flexibility to control federal funding while holding schools accountable for results.

A charter state option, Kafer explains, would help states accomplish two key goals: "The implementation of a single accountability system without interference from the federal government and the power to align federal funding with state programs and goals."

Creating the charter state option will require action by Congress, but the states aren't powerless. State lawmakers, local officials, and taxpayers can voice support for restoring state and local control in education. For example, state legislators who are critical of NCLB could introduce resolutions in favor of the charter state option. Building state and local support for the idea will be an important first step in convincing Congress that it's time to rethink federal education policy.

For more information, see Krista Kafer, "No Child Left Behind and Arizona: Making State and Federal K-12 Accountability Systems Work," Goldwater Institute, October 17, 2006.

Dan Lips is an Education Analyst at the Heritage Foundation www.Heritage.org.