The 2015 budget signed into law by Gov. Jan Brewer last month contains one important provision some school reformers believe represents a true gamer in the struggle to improve the educational outcomes for all students.

With $21.5 million allocated for the Student Success Funding program, Arizona now has in place a model that officials from other states should study and emulate. Simply put, it funds what works in schools, by aligning incentives to reward success.

The governor and those who supported the plan deserve great credit for tackling one of the most misunderstood, but most pernicious, problems in education today: the misalignment of education funding with positive academic outcomes.

This expanded approach, sponsored by Gov. Brewer and State Sen. Kimberly Yee, builds on a pilot established last year based on district and charter school A-F letter grades, to reward schools for improved academic results. Besides additional funding, this updated version is built on a better-designed evaluation system.

It is also the only part of the education budget that makes a clear connection between academic outcomes and education funding. Elsewhere, funding is duly provided, year after year, to all schools and districts regardless of whether academic outcomes improve or decline, which hardly helps students at low-performing schools. The existing system fundamentally discourages the kind of no-excuses efforts to improve the academic outcomes for every child that characterize the highest-performing schools and districts.

How do we know the current system isn’t working well? Based on data compiled by the Helios Education Foundation, only 17 percent of Arizona’s ninth-graders graduate on time. Seventeen percent! Further, Arizona ranks in the bottom 20 percent nationally in the reading and math performance of its elementary students as measured by the National Assessment of Educational Progress. Clearly, something needs to change.

This new performance-based funding approach provides three ways school districts and charter schools can earn Student Success Funding based on each child’s performance: students scoring at or above grade level on the state test, students showing higher-than-average improvement over their previous year’s test scores, and students graduating from high school.

Because students from low-income backgrounds often start school behind their peers, the new plan sensibly addresses this concern by considering student growth over time. This adds a critical piece of equity, mitigating any built-in bias against students who may start further behind, and thus test at lower levels.

It also means that schools and districts serving students furthest behind academically could actually get more money than those schools and districts serving students further ahead, because they are succeeding in producing greater growth.

Today, U.S. taxpayers spend 5.4 percent of the nation’s GDP funding elementary and secondary education. This system may not be sustainable at its present, low level of productivity. The Arizona Student Success Funding model is a strategic investment that leverages a relatively small amount of funding to incentivize significant changes, very much in line with what high-performing organizations across time have done.

Rewarding schools for both achievement and improvement can promote classroom innovation, competition, and student performance.

Arizona lawmakers should be commended for breaking from the cycle of funding mediocrity and failure. It will not be surprising to see other states move strategic education investments to a model that funds what works.

• Doug Mesecar, a former senior official at the U.S. Department of Education, and Don Soifer are education analysts at the Lexington Institute, a public-policy think tank in Arlington, Va.

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