Programs, or Education Savings Accounts, which were here to discuss today, provide families the opportunity to choose schools and learning options that meet their childs individual and unique learning needs. Instead of being assigned to a school based on where their parents live these models of School Choice and free people free children from assignment by zip code residential policies that bound them to a school in their neighborhood. Milton friedman says School Choice ensures children are free to choose and free to learn. It was in 1955 that friedman first outlined this concept of School Vouchers. Government administration of schools is neither required by the financing of education neuer justifiable in its own right in a pro dominantly Free Enterprise society. In other words friedman argued we should separate the financing of education from the delivery of services. That is apparently choose where a child attends school. He operationalized this idea of financing the education from delivery of services through School Vouchers. A set amount of dollars to School Families instead of School Districts. Milwaukee, wisconsin became the first city to implement friedmans idea. And in 1991 established the milwaukee Parental Choice program. It was the first large scale k12 Championship Program in the country. But friedman didnt stop thinking or tinkering with this idea of School Vouchers when that happened. In an interview with the journal education next in 2003, when friedman was 93 years old, he first professored up this idea. He said why not voucher for math in one place, english or science somewhere else. Why should schooling be in one building. Why cant children take some lessons at home with the ability of the internet. He was very forward thinking. That brings us to esas. It brought friedmans idea of the partial vouch tore life. We will hear a lot today about how they work. But Education Savings Accounts, which allow parents to direct every single dollar of their childs education thats in their account to not just a single private School Choice but to multiple services and products and providers represent the next generation of School Choice. Esas are a refinement of that voucher model that friedman put forward back in 1955 and are one of the most promising ways forward for School Choice. Before i introduce our panelists, i should note it is ironic that after todays event to honor milton freed maam who popularized theres no such thing as a free lunch, there will be a free lunch in the lobby. The center for educational freedom. He served as legislator in the New Hampshire house of representatives and Education Policy Research fellow at the Josiah Center for Public Policy. He published numerous studies on Education Choice programs with organizations such as the Friedman Foundation for educational choice pioneer institute, show me institute, and widely published in print and online media. He received his masters in Public Policy from the john f. Kennedy school of government at harvard university. And education director for the gold Water Institute. His work appeared in education next and georgetown journal of law and Public Policy. And real clear policy, national journal, along with newspapers across the country. Jonathan is a member of the Arizona Department of Education Steering Committee for the Empowerment Scholarship Program the nations First EducationSavings Account Program. And hes also a senior fellow at the Beacon Center of tennessee. Jonathan previously studied education policy at the department of education reform at the university of arkansas and worked with a School Choice demonstration project. The Research Team that evaluated the Voucher Program in washington, d. C. And in milwaukee, wisconsin. And prior to that, studied education and family policy here at the heritage found aation. Jonathan holds a b. A. From Furman University and m a a in economics from the university of arkansas. Last well hear from tim keller who serves as institute for justices Arizona Office managing attorney. He joins the institute as a staff attorney in 2001 is and litigates School Choice, economic liberty and other constitutional cases in state and federal court. Tim led the institutes defense of the tax Scholarship Program and Tuition Organization v. Wen which culminated in a United StatesSupreme Court victory. Tim successfully defended arizonas esa program. And perhaps the most interesting part of his bio, in addition to defending educational choice programs in arizona and nationwide, tim has helped knock down barriers to entrepreneurship on behalf of many hardworking individuals, including eyebrow fretters in arizona, african hair braiders florists in louisiana. Among these victories was his work on behalf of christian elf, a teenager from testimonympe, arizona to put steel mesh around senior houses. Very interesting bio. He has a degree in economics from asu. Please join me in welcoming our panelists. [ applause ]. That you can very much is lindsey. That you know, heritage, for putting this event together. As i was driving over here in my uber, i was speaking with the driver. He asked what i was doing. I said we were having a panel on the future of education. He said, well, you know, theres two ways to solve the problem with education in this country. So of course i was very interested to hear what he had to say. He said theres the natural way and the miraculous way. I said whats the natural way . He said the natural way is if a an angel of the lord were to come down and to teach us exactly how we should create a quality learning environment for every student at a reasonable cost. And i said well, thats the natural way. Whats the miraculous way. He said the miraculous way is youll figure out yourself. I first heard from from Professor Jay green from the university of arkansas. It heights the challenges before us. One of the first places we will look at is the incentive structure. Milton friedman and other economists talked about four different ways we can spend money. He pointed out you can spend your money or somebody elses money. And you can spend that money either on yourself or on someone else. So when youre spending your own money, you have an incentive very strong incentive to economize. When you spend money on yourself, you have a way to maximize the value for what you get. The best structure is where youre spending your own money on yourself. Thats where you will maximize the value and youre going to economize. Unfortunately, our Public School system in this country is category four spending. Theres other people spending other peoples money on other people. So you have a weak incentive either to economize or maximize value. We have seen the last four decades, the cost of k 12 education this chart shows the total cost of k12 education, kindergarten through high school over the years has tripled. Inflation adjusted dollars. And yet we see that test scores have been absolutely flat over the same period. So were spending three times as well and not getting any more bang for our buck. Part of this has to do with how much more we are spending on teachers and other staff. Theres been a staffing surge here this chart for the National Center for education statistic shows that weve had about a doubling in the student population since 1950. And yet the number of total School Personnel has gone up by 400 . Teachers, only 250 . But the number of nonteaching staff has increased by 700 over that same period. When the number of students has only just about doubled. And parents arent getting what they want. The Public School system is actually crowding out other alternatives. So when this is a poll from the Friedman Foundation last year. They found 40 of parents, if they had the ability, would send their children to a private school. Another 11 would home school and the rest to charter. 83 are going to the Public School system. So thats where friedman as idea that he discussed about 60 years ago comes in. The School Vouchers. As lindsey explained, the idea that we would separate the financing from the actual provision of education. To ensure every child had access to a quality education but wouldnt necessarily be the ones running the system. So going back to the fourways of spending money. That is a significant improvement. Now we have parents spending money on their own children, maximizing the value they are going to get. But still using other peoples money. They dont have a very strong incentive to economize. And we see this with higher ed vouchers, also known as pell grants. That the tuition and fees have far outpaced the inflation over that period. This is called the bennett hypothesis. So School Choice, you see here in this little cartoon theres the Public Education system which is one size fits all. And then School Choice, you get ava right of options of different schools. But just as a shirt is not the sum total of ones wardrobe, schooling is not the sum total of education. And a voucher can only be used at another school. And so thats where Milton Friedman said, how do we know how education will develop why is it sensible for a child to his or her school in one building. Why not spend math in one place and english or science somewhere else. Why cant they take classes at home with the availability of the internet. So Education Savings Accounts are Bank Accounts parents can use for a wide variety of expenses and save for future expenses. So this doesnt get us quite all the way. And you see the arrow doesnt go all the way into the green box. Because the government is still putting a portion of the funds they would have spent on that student in a Public School into the account. So the parents are still spending other peoples money to an extent. But now they are able to spend it in one place and able to save. With a voucher, if you get a 5,000 voucher, you can only spend it at a school and you must spend the entire amount. A school would be foolish to charge less than 5,000 f. Theyre getting a 5000 voucher, theyre leaving money on the table. Here, though theres downward pressure on price because there is no forward. They can save it and use it in multiple places. This allows for the unbundling of the education system. So what is it that is killing the newspaper stokes. Its not just the Huffington Post providing the news sources. There is google yahoo people are turning to. But things like match. Com and e harmony are taking a bite out of their section. Craigslist and ebay are taking a bite out of classified ads. Urban spoon, cars. Com, the automotive section the culture and food section. So you have all these different players coming in and unbundling this whole bundle of services that the newspapers were providing. Likewise, we have the same thing happening in education. So john butcher and i did a study a couple years ago on the Education Savings Account in arizona to see how are they using this program. 65 of the people in our survey were using the funds the esa funds, for Traditional Private School education. Although a good number of them were also buying things like Educational Therapy. And the first year these were all families with students with special needs. But they were also we just lost power on that. But they were using a whole bunch of services. Educational therapy. They were using can i get that back. Were going to need some of this. They were able to completely customize a la carte for their kids. Some were home schooling some online learning. But they were able to figure out what worked best for their kids. We now have a question how should we regulate this system. We have some people that believe, well, were going to let them have is choices. But essentially youre going to have to choose, you know, among you can choose any car you want as long as its yellow and follows these guidelines. Uber says we will give more freedom to the drivers and we are going to allow the customer to have the ultimate say. Accountability is going to rest with the customer. Likewise, rather than having a system of common core in standardized testing where everybody has to meet the same standard, we should be moving in the direction where there are actually different forms of accountability. There are competing standards. There are competing school models. Parents have the ability to choose among these different models and see what works best for them. Its a process of experimentation, evaluation, and evolution. So experimentation meaning that the schools are going to try different things. We dont know the one best way to provide an education. Assuming there is such a thing. So we should have a system that allows a great amount of innovation and diversity. And then we allow parents and the end user, parents and students, to evaluate what works best for them. And then the evolution comes when there is a market response to that. Where the schools see where the parents are going what theyre looking for. And if theyre successful, they expand their model f. Theyre not very successful they change what theyre doing based on what is working and what parents and students are looking for. So thats the direction we should be going. And thats what educationsavings accounts are all about. [ applause ]. They are working on a backup. No problem. Thank you. Thank you, lindsey. Thank you, jason. Good afternoon, everyone. My name is jonathan butcher. Im the education director at the gold Water Institute headquartered in phoenix, arizona. Its a pleasure to be here in washington with you today. The First Educational savings plans in arizona in 2011. It was right about that time that i got to know a couple of families. I got to know the family of cathy and jordan visser. Lynn mcmurray and her children. And i got to know a amanda and Michael Howard and their son nathan. I would like to introduce you to them for just a moment. So cathy and her husband christo moved from one part of the valley, as we call phoenix, to a different section, up to the northeast corner. And as they looked to move and find a new school for jordan, they saw they were going to have to negotiate with their School District to find the best services for jordan. Jordan has mild Cerebral Palsy and other learning delays. The school he was attending on the other side of phoenix, they had a preschool and Kindergarten Program that worked with his unique needs and were able to provide services to help jordan make it through each day. When they moved into the scottsdale area, the School District wasnt prepared and wasnt interested in providing the services that jordan needed every day to make it through the school day. So cathy and christo tried to negotiate and discuss with the district what jordan needed. But they could not come to an agreement on how to provide a great education for jordan. So fortunately for the vissers this was about the time arizona lawmakers enacted Education Savings Accounts. Cathy and christo applied for jordan. They used their account first to accepted jordan to a private school that had a focus on helping children with special needs like jordan. As jason was describing just a moment ago, many of the families in that first year used their educational save savings account for those needs. What happened next is an interesting part of the story. It was after that first year cathy and christo decided they wanted Something Else for jordan. They took him out of school and began paying for personal tutors, Educational Therapy that he was already receiving outside the classroom, as well as Additional Services in the home for jordan. So his school day looks like a combination of providers coming to the home to help him each