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Ever since the publication of "A Nation At Risk" in 1983, Americans have been preoccupied with two problems regarding public education: (1) student performance is unsatisfactory to most Americans despite large increases in real spending per student; and despite several attempts at reforming curricula, teacher training, testing, and other elements of education; and (2) the nation's schools see a large and persistent gap in scores on standardized tests between white and Asian students on the one hand and black and Hispanics on the other. Reform, however, has been hindered by a deep philosophical divide within the school reform community. On the one hand, the radical "market" reformers believe that public school districts are public monopolies unresponsive to the needs of their "customers" and incapable of change. Members of this group support vouchers, charters, tax credits, etc. On the other hand, the more moderate, "internal" reformers believe that public school districts simply need more support and better management. These advocates generally tend to favor decentralization, public school choice, lower class sizes, increased spending per pupil, etc. Recently, a reform program has emerged that may well lead to some consensus between many members of "both" groups. This reform is Weighted Student Formula (WSF), a system of per-pupil budgeting that is now used in three large North American districts: Edmonton, Seattle, and Houston. In a WSF system, dollars are allocated to each student, and these funds follow the student to the local school. Children with greater needs--be they poor or disabled or non-English speaking--receive a higher allocation, giving schools the ability to provide extra services to these needy students, knowing that the weighted funds will "follow" the student to the school and classroom. Local educators are then given much discretion to determine how best to meet the educational needs of their student population. The purpose of this paper is to: (1) Compare and contrast the WSF systems used in Edmonton, Seattle, and Houston; (2) Highlight how WSF is different from the resource allocation systems used in most urban districts, especially New York, Chicago, and Los Angeles; and (3) Make recommendations about how a district can implement WSF successfully, based on the lessons from Edmonton, Seattle, and Houston. (Contains 10 tables and 4 figures.)

In school finance lawsuits plaintiffs often claim that pay levels are not sufficient to recruit teachers who can deliver constitutionally-mandated levels of educational services. In this paper I consider several ways in which one might bring economic theory and data to bear on that question. I conclude that at present, and at least for the near term, education research cannot prescribe an "adequate" level of school spending on teachers, whether in the form of pay, benefits, or professional training, that can reliability predict a target level of student performance. If courts are predisposed to intervene in this matter, a more reasonable standard for "adequacy" is whether available revenues, when spent in an efficient manner, are sufficient to staff classrooms with appropriately-certified teachers in a flexible licensing regime that satisfies both state and federal teacher quality standards. (Contains 6 figures, 7 tables and 15 endnotes.)