though we do not know how to identify this level with precision, it is important to try. But providing adequate funding by itself may do little to foster significant improvements in overall student achievement. Thus, while funding adequacy may be a necessary part of any education reform effort—and is likely to be especially crucial for districts or schools serving disproportionate numbers of disadvantaged students—it is at most part of an overall program for increasing student achievement in a cost-efficient way.

  • Teaching all students to higher standards makes unprecedented demands on teachers and requires changes in traditional approaches to teacher training and retraining. In addition to nonfinance policies for investing in the capacity of teachers (e.g., reforming teacher preparation and licensing), finance options might include raising teacher salaries and investing in the professional development of teachers once they are on the job. Given schools' need to hire 2 million new teachers over the coming decade, raising salaries—especially for new hires—may be needed to ensure sufficient numbers of qualified people in classrooms. Professional development that is aligned with curriculum reform and teaching objectives offers the promise of changing teaching practice in ways likely to improve student performance. But neither approach is likely to be effective in achieving goal I unless it is aligned with appropriate incentives throughout the education system to make performance count.

  • Altering incentives responds to the fact that the school finance system historically has operated almost in isolation from educational performance, in that educational goals and desired outcomes have seldom been reflected in pay for teachers and budgets for schools. Traditional teacher salary schedules provide higher pay for experience and postgraduate degrees, neither of which appears to be systematically linked with student achievement. Skill and knowledge-based pay shows greater promise for making teachers more effective in the classroom but remains to be tested. School-based accountability and incentive systems are increasingly popular and seem to contribute to desired student outcomes. To be fully effective, however, they require adequate funding for schools and attention to capacity building.

  • Empowering schools or parents to make decisions about public funds (via enhanced site-based management, charter schools or contract schools, or vouchers, for example) has been justified as a strategy for improving student achievement in a cost-efficient way based on a variety of different arguments: some contend that local control will enhance innovation at the school level; some believe that schools with a strong sense of community perform better; and some believe that the introduction of competition and the possibility of losing students (and their associated funding) will encourage schools to be more productive than under the current monopoly situation. Although positive effects for children using vouchers have been reported from several sites where vouchers have been tried, the small scale of current programs leaves many important questions unanswered.

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