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Truth Is On Our Side: An Exclusive Interview With John F. Kirtley

June 1, 2004

Although he lived in Tampa, Florida, venture capital entrepreneur John F. Kirtley got his introduction to education reform in New York City's South Bronx neighborhood.

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Although he lived in Tampa, Florida, venture capital entrepreneur John F. Kirtley got his introduction to education reform in New York City's South Bronx neighborhood. During the 1990s, his frequent business trips to Wall Street had brought him into contact with fellow finance executive Peter Flanigan, who had established a philanthropic effort called the Patron's Program where participants would use their business skills and knowledge--and donations--to support individual Catholic schools in low-income areas of the city.

It was a revelation to Kirtley, a product of the public schools, to find so many low-income parents who were willing to pay for their children to attend these struggling private schools when there was a tuition-free public school nearby. He subsequently embarked on a series of education reform efforts that eventually led to him leaving the world of venture capital, where he had been very successful, and devoting himself full-time to expanding parental choice in education.

A native of Iowa, Kirtley moved to Florida when he was 16. After graduating from the University of Virginia and working in New York for four years, he co-founded the Tampa-based venture capital firm, FCP Investors, specializing in management buyouts of small companies. In 1988 he created a scholarship fund to offer private school scholarships of up to $1,500 for low-income families around Tampa Bay. When he received 17 applications for every scholarship, he increased his school choice efforts by working for the enactment of the nation's first statewide voucher program, and by supporting the creation of a corporate tax credit program to fund private school scholarships for children in low-income families.

In September 2002, Kirtley was named president and CEO of Children First America (CFA), a school choice organization formed 12 years ago to replicate the privately funded scholarship model across the country. CFA has recently merged with the American Education Reform Council to create the Alliance For School Choice, which will be headed by Institute for Justice veteran Clint Bolick. Kirtley recently spoke with School Reform News Managing Editor George Clowes.

Clowes: How did you become interested in education reform?
Kirtley: My experience had been in the business world completely. Then came my exposure to the Patron's Program. I was assigned to a wonderful school called Christ the King in a very low-income neighborhood in the South Bronx. That was my real first exposure to private education, which until then I had thought of as expensive and exclusive. It was quite a shock to find this K-8 school with about 300 black and Hispanic students who all met the standards for the free or reduced lunch program.

Also, I was stunned to find that these low-income parents were paying tuition of $3,200 per year per child. To do that, they would be working two jobs, doing without phone service, and so on. It was really amazing.

At about that time, in 1997-98, I read about the private scholarship programs that were being formed through Children First America and so I decided to start one in Tampa Bay. I was very fortunate that just after I had decided this, John Walton and Ted Forstmann announced the formation of the Children's Scholarship Fund. They were looking for local partners to match funds with, and I said, "I'm your guy in Tampa Bay." That enabled us to double our funding.

We formed our scholarship program in 1998 and offered 700 partial scholarships to help low-income parents send their children to private schools, with a maximum of $1,500. We did very little advertising but we got 12,000 applications for 700 scholarships. There was obviously a huge demand for parental choice among low-income parents in Florida.

Clowes: So you were just trying to help low-income parents who wanted their children educated in a private school?
Kirtley: I absolutely had a desire to help the parents, but there was a broader purpose, too. I had started to become more politically aware and discovered I was probably a libertarian. During that discovery process, I read Milton Friedman's wonderful book, Capitalism and Freedom, and when I read the chapter on education it hit home with me for a number of reasons.

Our venture capital firm had once owned a company that had 100 percent of a small market. Our prices were higher than they would have been with competition, our quality was not as high, and our customers had fewer choices. Well, we soon had competition. A group of managers left the company that we owned, started another one, and offered the product at half our price. Our company went bankrupt. That drove home to me the power of the customer--through their ability to choose--to demand better quality, lower prices, and more variety.

When I was working with the school in New York, I asked the parents why they weren't saving the tuition and sending their children to the free public school just down the street. You see, I was a public school guy, and I had had a very good experience. And they said, "Because they won't learn as well there, and nothing is more important to us than our kids' learning."

So, truth be told, it wasn't just a desire to help the parents and their children--though that was certainly a huge part of it--I also was compelled by what I was seeing in terms of a real-life illustration of what Milton Friedman had talked about in his book. And then I was just stunned when we got the 12,000 applications.

At the same time, Jeb Bush ran for governor on a platform of school choice for children in chronically failing public schools, and he won. Since we had so many parents who were obviously interested in parental choice and educational freedom, we worked to help him get his education program passed, which was done in early 1999. It was the first statewide voucher program in the country.

We were very excited about that, because we expected a great number of children would get vouchers. If schools got two F-grades in four years, they had to offer vouchers to their students, and in the first year the schools were graded, there were about 70 F-rated schools with about 60,000 students. But the next year, every single school got off the failing list.

There were only two logical explanations: Either the schools had improved dramatically under the mere threat of competition, or the grades were not accurate. I felt very bad for Florida's low-income parents because though I felt the schools had definitely improved, I didn't think the schools had improved enough in one year to eliminate every single failing school. There wasn't a single "failing" school in our area and yet we had received 12,000 applications from parents who wanted an option.

That's when we started to work towards passing the corporate tax credit law to make more choices available to those families. We have no personal income tax in Florida--that's why many people move here--and so it had to be a corporate income tax credit. We got that passed in May of 2001 and it took effect in January of 2002. By that time, I had quit my job and was working in school choice full-time.

Clowes: The newspaper coverage of Florida's school choice programs seems to report every problem prominently, whether it's large or small. Why aren't problems in the public schools given the same priority?
Kirtley: I ask that same question all the time of the newspapers, especially the one with the most biased reporting, the Palm Beach Post. Let me just give you an example.

One of the charges by the Post was that we don't know if the choice schools are safe--physically safe. They were claiming we had no evidence the schools were in compliance with all the numerous laws pertaining to health and safety at private schools. Although there were no complaints and no reported incidents, the Post was writing stories about how you just don't know--they could be unsafe.

About that time, a ceiling collapsed in the media center at a recently renovated public high school in Miami. Fortunately, it was on a weekend, otherwise it would have been crowded and children could have been killed.

So I said to the Post reporter, "You're writing these stories about potential problems in choice schools, and yet you don't want to write a story about an actual incident where a roof caved in at a public school. Why is that?" And he said, "That's a local issue."

The Post has refused to publish numerous letters to the editor from me, from parents, and from school administrators. They refuse to publish letters from CEOs of companies in the tax credit program. They even refuse to publish letters from the Commissioner of Education. I think if a paper is going to have a strong bias against something, they should at least have the courage to publish letters with opposing views.

Clowes:The No Child Left Behind Act attempts to hold public schools accountable for results, but it doesn't apply to choice schools. Shouldn't private schools be tested, too?
Kirtley: The first thing we have to ask ourselves is: "What does accountability mean?" To me, accountability means: If you don't do the job, you lose the business. That's accountability in the business world.

Now, if you look at the typical situation with a public school in a low-income neighborhood, if the public school is not doing the job, what consequences are there? Usually, none. The school doesn't lose the business, and so there is no accountability.

Compare that to a private school educating a child with one of our scholarships. The scholarships aren't given to schools, they're given to children. The children and parents are the customers, not the schools. If the private school is not doing the job, the parent can take the scholarship immediately to another private school. Private schools have to earn the right to educate children every single day, or they lose them. To me, that is a higher level of accountability than a public school in a low-income neighborhood where the parents are powerless to move their children.

We did a survey last year of 400 schools in the tax credit program and found that 95 percent already were administering a nationally recognized norm-referenced test. We did the survey because we had to respond to a media environment that is very hostile towards school choice in Florida. We are working on legislation that would require private schools participating in the tax credit program to administer a norm-referenced, nationally recognized standardized test--even though most are already doing that.

We're also working on a requirement for a third-party research entity to analyze the learning gains of choice students on a longitudinal basis. The students certainly are behind when they start, but I'm convinced they are making tremendous learning gains. To be able to demonstrate that would be a very politically potent thing to have in the fight for more school choice.

Clowes:How much additional regulation will private schools accept before they begin to balk at losing their unique identities and missions?
Kirtley: What we have found in Florida is a wide range of private schools in terms of price. Some exclusive suburban schools cost $10,000 a year, while most of the ones in urban areas are relatively inexpensive. The urban schools are the ones that are helping our children in the tax credit program. For example, in Tampa Bay the average tuition of the schools in our program is about $4,000. These schools tend to have a somewhat higher tolerance for the risk of government intrusion.

Last fall, the Florida Department of Education (DOE) decided that private schools participating in the McKay or tax credit scholarship programs would have to submit a form to the DOE showing they were in compliance with the health, safety, and fire code laws pertaining to private schools. A very small percentage of schools reacted negatively to that on the grounds of government interference and chose to leave the program. They were fairly high-end schools helping just a few students in our program. But the schools that were located in low-income areas had no problem with the DOE requirement.

Clowes:How do you see school choice options developing in the future, and what is the biggest obstacle to that development?
Kirtley: Right now in Florida, we have three programs. We have the Opportunity Scholarship program, the A+ plan, which currently has only about 800 children state-wide. It's being litigated in the courts and its fate will depend on how that turns out.

Then there's the McKay Scholarship program, which has not been challenged in the courts. The program serves over 12,000 students and I think it will continue to grow as quickly as supply can expand. It's a wonderfully designed program, with the per-pupil amount the same as in the public school, and no cap on participation. In fact, the Friedman Foundation called it the best voucher program in the country.

The tax credit program has a total funding cap of $88 million per year and a scholarship cap of $3,500 per student. In my opinion, $3,500 is too low for a per-pupil amount. It's too low to provide a high-quality education--although many schools do, through miraculous efforts--and it's too low to spur a material growth in the supply of private schools in low-income areas.

The opponents of school choice are very concerned about what's going on in Florida because they see how widely these three programs have been accepted by parents. They get very concerned when they see 3,000 low-income, minority parents going all the way to Tallahassee to attend a rally to support the tax credit program. It frightens the dickens out of them. And so they're doing all they can to push us back. Unfortunately, they have a willing partner in the press in Florida.

To truly further school choice in Florida, we have to protect the McKay scholarship program, which is very well designed. In my opinion we need to convert the tax credit program to a voucher program, in order to have the funding to reach many more low-income students. Further, the per-pupil amount must be adequate to help create supply. That can only be done after we win the Blaine amendment case in Florida, which may take a couple of years to resolve.

In the interim, we must continue to build our grassroots support for choice, and we must make support for choice more bipartisan. We must also show that choice is working to improve the lives of children in both public and private schools.

These are high goals, and they will be difficult to accomplish in Florida's highly polarized and partisan environment, especially with our media very biased against choice. But we will succeed. The opponents to choice might have more money--and their allies in the press might buy ink by the barrel--but we have the benefit of having truth on our side. I would always rather be in our position.

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Education
Author
George Clowes is former Heartland senior fellow addressing education policy. He served as founding managing editor of School Reform News between November 1996 and January 2005.

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