system that classifies schools and districts by using their TAAS passing rates, dropout rates, and attendance rates.

Under the system, the state rates districts each year in four categories: exemplary, recognized, academically acceptable, and academically unacceptable. The state also rates schools in the following categories: exemplary, recognized, acceptable, and low-performing. The standards for each designation have risen over the past few years, as performance has improved.

Significantly, schools must demonstrate that students in each group—black, Hispanic, white, and economically disadvantaged—as well as students overall, have met the required passing rates in order to earn a status of acceptable or above. In this way, schools cannot attain high ratings if only a small group of their students perform well.

Schools rated as acceptable or low-performing or districts rated academically acceptable or academically unacceptable must show required improvement. To meet that standard, a school or district with a TAAS passing rate below 40 percent in any area must show that, over two years, its rate of change exceeded the rate required to reach a 50 percent passing level within five years. A school or district with a dropout rate above 6 percent must show a two-year rate of change that would meet or exceed the rate needed to reach a 6 percent rate within five years.

The accreditation ratings are used to determine rewards and sanctions. High-performing schools, those designated exemplary or recognized, and those designated acceptable that have demonstrated significant gains in student performance, are eligible to share monetary awards. In 1997–1998, the legislature appropriated a total of $5 million over two years for such financial awards; schools can receive between $500 and $5,000. These financial awards are not considered a significant motivation to improve performance.

The sanctions are considered more important. For districts that are academically unacceptable, the state commissioner may order the district to publish the ratings to all property owners and parents; require the district to develop an improvement plan; appoint a master to oversee the operations of the district or a management team to direct operations in low-performing areas. If districts are rated academically unacceptable for a year or more, the state may replace the school board; if a district is rated academically unacceptable for two years or more, the state may annex the district to a neighboring district.

For schools that are designated low-performing, the state may notify the district of its status; require the school to develop an improvement plan; or appoint a special intervention team to conduct an on-site evaluation and recommend appropriate changes in budget, personnel, or school policies. If a school is designated low-performing for a year or more, the state may appoint a board of managers to assume the school board's authority over the school. A

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