State education departments find themselves pressured to reduce costs while improving student performance. To do so, state education departments must measure the performance of each school district in an objective, data-informed manner. We present a benchmarking methodology and illustrate its application in New York State school districts. We found that New York State can improve performance on standardized tests in English, Mathematics, and Science by 5.8% to 7.1%, improve graduation rate by 6.4%, and reduce staffing by at least 8.4%. The methodology provides three alternative strategic directions for each school district.