"Thank you, Bill.  Good afternoon, everyone.  I really appreciate the opportunity to join all of you here at Disney World.  I can't wait to get over to the Magic Kingdom. I just love cartoon characters; outlandish fairy tales; and wild, stomach-churning roller coaster rides. I mean, why else would I be in City government?

"But of course, business comes first:  The vital business of this education summit. And if my school teachers back in Medford, Massachusetts had ever been told that Michael Bloomberg would someday be addressing a national conference on education, they wouldn't have believed their ears. After all, they had me pegged - accurately, too - as the sort of student who usually made the top half of the class possible.

"Since those days, however, I've gained a much greater appreciation for classroom learning and also for education leadership. The kind of farsighted leadership that Jeb Bush demonstrated as the governor of the Sunshine State and that he now continues to show as the president of the Foundation for Excellence in Education.

"The school reforms that he pioneered here in Florida are crucial not just for this state, but as models for our entire nation. And I want to commend him, along with Robert McClure and the James Madison Institute, for convening this summit and for bringing us together to take this all-important struggle to the next level. Because the excellence in education that Governor Bush inspired in Florida that we've worked to create in New York City and that so many of you have championed in your home cities and states. Now must become the norm in our nation's schools, from coast to coast.  That's because the stakes just couldn't be higher. 

"Today, America faces a time of great economic uncertainty.  No doubt about it, we're still the world's number one economic power.  But will that still be true for the children in our schools today? That depends completely on the quality of the education we give them.  They're going to be running a fast-paced, knowledge-based economic race with youngsters in nations around the world. Nations that are, in many cases, doing a much better job than we are of preparing their children to run that race, and win it. 

"Some 18 months ago, a blue-ribbon national task force, the New Commission on the Skills of the American Workforce, reported these sobering facts:  Across our nation, only 18 out of every 100 high-school freshmen graduate on time, enroll directly in college, and earn a two-year degree in three years or a four-year degree in six years.  Only 18!

"If we don't move that number up, dramatically, our children will face futures as second-class citizens in the competitive global economy. So if there ever was a time to be bold, this is it.  We've got to face the tough challenges.  We've got to stop fattening up the sacred cows of the status quo.  Because the observation made by the late Senator Daniel Patrick Moynihan, included in the 'Nation at Risk' report on the state of American schools 25 years ago, is still true in 2008. He said, 'If an unfriendly power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war.' So it is long past time to address head-on the policies that give ineffective teachers a free ride, year after year.

"It's time to demand accountability from everyone in the education system. It's time to stop kowtowing to the special interests. And it's time to start putting the children first.

"In New York City, we've spent six years turning a school system that was once a poster child of dysfunction into a model of progress and hope. We've still got a long way to go.  But we're definitely headed in the right direction. And in a few minutes, I'm going to summarize just how far our students have come in six short years. But first, let me talk about how New York City schools are setting the pace of change. 

"The key word is 'PACE' - our recipe for reform. That's 'P' plus 'A' plus 'C' plus 'E.' Does anyone know what those letters stand for?  All right, here's the answer:  People; Accountability; Competition; and Empowerment.

"First comes 'P' - because making effective change always starts with People. And changing our schools starts with the teachers, because nothing raises student performance like improving the quality of their classroom teachers. It's true that no one goes into education to make a fortune.  But it's also true that just like the rest of us, teachers and principals have families to feed and bills to pay. And that makes money a tried and true performance motivator.

"So over the past six years, we've increased teachers' salaries by 43 percent. But we haven't stopped there.  We're also using financial incentives to attract and keep the best and brightest teachers.  Our Teaching Fellows program helps thousands of our best young teachers pay for their graduate education. And the housing bonuses we provide math and science teachers give us a competitive edge in attracting the best instructors in those all-important fields.

"Our most recent contract with the union representing school principals offers them a 'pay for performance' bonus of up to $25,000 a year.  We're also instituting merit pay for teachers, an idea I'll return to in a few minutes. But even the best people need a sound structure in which to work. 

"And that's where 'A' - Accountability - comes in. Accountability is just essential in any organization or enterprise.  It's especially vital in our schools.  Instituting accountability standards is central to the reforms embodied in the No Child Left Behind Act. And it says a lot about the independence and integrity of Senator John McCain that at a time when the allies of the status quo have made NCLB a political punching bag, he continues to express his support for those accountability standards.

"The school system that we inherited in New York was definitely a case study in the need for accountability.  And that started with the governance structure.  There was a central Board of Education that was in charge only of the city's high schools.  And even though most of the money for all the schools came from the City's budget, the mayor appointed only a minority of those board members.

"Then there were 32 local school boards, chosen in elections where a 3 percent turnout was considered robust. They ran 32 little fiefdoms, often riddled with patronage, that oversaw elementary and middle schools. So what you had was nobody in charge:  a recipe for dysfunction.

"In the nation's largest school system, with 1.1 million students, 78,000 teachers, and 1,450 schools, there was no standard curriculum for any subject, including reading or math.  Nor was there any system-wide expectation of student achievement - so social promotion was rampant.  Policies were tailored to suit the system's top-heavy bureaucracy - not because they were best for the students.  The result was predictable:  Schools that all too often consigned students to failure, year after year. This just couldn't go on.

"When I ran for mayor in 2001, I made school reform the centerpiece of my campaign - and I asked the voters to judge me, if I won, on whether or not I started turning the schools around.  The voters took me up on that.  So when I got to City Hall, I went right to work on bringing accountability to the schools. That meant putting the mayor in charge of the City schools. 

"Now, the three preceding mayors - of both political parties - had all worked toward that goal, and had moved the ball a long way down the field and I give them all the credit in the world for that. And I also commend the Governor and legislative leaders of New York State - again, representing both parties - for doing the right thing in 2002 and passing a law, which we marked the sixth anniversary of last Thursday, establishing mayoral control of the schools.

"That ushered in a new era of accountability.  It allowed us to clearly define responsibilities and expectations, set standards, and measure results.  Accountability starts at the top.  And believe me, when we make mistakes, which we do, people now know who to blame. Accountability also runs all the way through the system right down to the individual schools.  We've established annual data-driven quality reviews of every school.

"As I learned in my first job on Wall Street:  'In God We Trust - everyone else bring data.' And based on that data, there are now consequences for failure in our schools.  We've shown that by closing 80 schools that were chronically failing to educate their students.  With accountability also comes authority. And using that authority, we instituted standard citywide curricula, first in English Language Arts and math, and then in science and in the arts.

"We ended social promotion, starting in 3rd grade, then in the 5th and 7th grades and, in the next school year, in 8th grade, too. And we made one thing absolutely clear: We weren't about to let a violent or criminal minority in the schools deprive the vast majority of students of their right to learn.

"Mayoral control of the schools enabled us to make that stick. For the first time, both the Department of Education and the police were answerable to the same person:  the Mayor.  So for the first time, we developed a coordinated strategy involving students, principals, teachers, school safety officers, and the police.

"We stepped up enforcement, and also stepped in to give teachers, administrators, and students the tools they needed to increase the peace in their schools. The results speak for themselves.  We've reduced crime in our schools by 24 percent from where it stood five years ago. And we're never going to let disorder get the upper hand in any of our schools again.

"Next comes 'C' - for Competition. Now, I'm a dyed-in-the-wool capitalist. I spent 35 years in the private sector, first on Wall Street, then starting and running my own pretty successful company, which now operates in more than 130 cities worldwide. So I appreciate how competition improves products and services, rewards innovation, and weeds out failure.

"Unfortunately, competition - like accountability - was a largely foreign concept in the old school system.  But we've changed that - big time.  To instill competition, we've dramatically increased school choice.  We have, for example, made New York the most charter school-friendly city in America.  When we came into office in 2002, there were fewer than 20 charter schools in the entire city.

"By the time we leave office 559 days from now, we'll be well on our way to having more than 100. And I doubt that even that growth will put much of a dent in the huge demand for charter schools in our city. Want proof?  Just look at what happened when the Harlem Success Academy charter school held an admissions lottery this spring. Nearly 3,600 families applied for 600 student slots; 900 students put in for just 11 openings in the 2nd grade.

"Now, numbers like that ought to make any defender of the status quo in education stop and think again. Because it couldn't be clearer that students and parents want choice, and they want change - and choice and change are exactly what charter schools offer.

"That's why we need more of them - and why we also need more of the new, small secondary schools that offer greater individual attention to students and wider choice to their parents. Over the past six years, we've opened 200 of these schools.  And today, their graduation rates stand at better than 75 percent. More than 40 points higher than the graduation rates of the large, traditionally structured high schools that they replaced. The evidence is clear:  When schools compete - and when students have options - everybody wins.

"Now, finally, what about 'E' - for Empowerment? In the old days, lines of education authority were so hazy that the real power was exercised by the bureaucrats and special interests who knew how to work the system to their own benefit.  Now those days are over - and they're over because we've empowered the people who matter the most: the principals, teachers, and parents.  We've taken decision-making power out of the hands of the bureaucrats and put it in the hands of the school principals.

"That's meant putting principals in the driver's seat when it comes, for example, to deciding what teacher training and other services their schools and students need. We've backed that up with a new funding formula that for the first time gives every school in the city a fair budget deal from City Hall.  We've dramatically downsized the school bureaucracy, and poured the $350 million into school budgets, too.

"We've extended the concept of empowerment to our classroom teachers, too.  One of the thorniest issues in school systems across the nation is deciding how to reward good teachers who are willing to work in schools where their skills are needed most.  It's encouraging that Senator McCain has embraced the concept of such merit pay, and that Senator Obama has suggested an openness to it as well.  But the real test - the one any true leader has to pass - is moving from rhetoric to reality.

"In New York, this is what we've done to make merit pay a reality.  Last fall, we reached a breakthrough agreement with the teachers union to establish merit pay bonuses for teachers in up to 200 high-needs schools. And what's crucial is that it incorporates the principle of teacher empowerment. Because we're giving teachers in the eligible schools a big role in allocating the bonuses.

"The people we've worked hardest to empower are the ones who the old status quo most thoroughly left out in the cold: the parents - who as voters, are also our bosses. To empower them, we've hired parent coordinators in each of the schools - whose job is to work for parents, answer their questions, and encourage parent involvement.

"And last fall we started publishing school progress reports in 10 languages that give schools letter grades from 'A' through 'F.' That tells every parent in the city just how well the schools that their children attend are doing.  It empowers them to demand better school performance.

"People plus Accountability plus Competition plus Empowerment:  In the last analysis, what does that all add up to? The answer:  Results.  Remember what I said about only trusting data? In that spirit, now hear this:  In 2002, fewer than 40 percent of students in grades 3 through 8 were working at or above grade level standards in English Language Arts and math.

"Today, close to two-thirds are meeting or exceeding those standards in math, and more than half are in ELA. The most heartening thing is that our black and Hispanic students are leading the way. Graduation rates are also on the rise; they're the highest they've been in more than 20 years. In fact, in recent years, our students have gained more ground than students in any other city school system in our State, and are doing as well or better than students in many suburban schools.

"Now some of you may be thinking:  That's New York; what does all that mean to me in my hometown and state?  Simply this:  If we can turn the schools around in New York they way that we have, then you can, too. That doesn't mean the job is going to be an easy one.  It won't be for you, and it still isn't for us.

"Let me quote a great education leader:  'Reform is never finished and success is never final.' That's our host, Governor Bush, speaking.  And as usual, he has hit the nail right on the head. So has New York City Schools Chancellor Joel Klein, who last week helped launch a new national campaign, 'The Educational Equality Project,' designed to put school reform front-and-center in this year's Presidential election.  I say:  More power to them. 

"Because both major candidates and both major parties must address this ringing indictment included in the Education Equality Project's 'statement of principles,' and I quote:  'Despite the urgency of the need and the righteousness of the cause, public education today remains mired in a status quo that not only ill serves most poor children, but shows little prospect of meaningful improvement. The definition of insanity is doing the same thing over and over again and expecting a different result.  That is the trap we must avoid, or risk losing another generation of our children.'

"No. Reform is never finished, and success is never final.  But in this case, in fighting to save the next generation of our children, success just happens to be vital. Whatever your role in this struggle, and wherever you're returning after this conference ends, may your efforts to win that fight be crowned with success. Thank you.  God bless you all."