Although the nation is spending more on its public schools than ever before, American students score poorly on standardized tests in comparison to other countries. Rising spending has had little effect on educational results because of a dramatic decline in labor productivity in public schools. Research on class size indicates that efficient class sizes are the product of many variables. Reductions in class size have the most effect in the primary grades (K-3), especially in regard to pupil behavior and attitude. School board members should review carefully requests for additional instructional staff. Successful solutions to problems of educational delivery must reduce public school monopoly power, encourage accountability, and reward productivity. A choice system gives parents alternatives among schools. Guided by sound policy, a choice plan can serve the goals of cost efficiency and educational quality. Twenty states are exploring some form of public school choice system. Other approaches to productivity reforms include allowing staff to share directly in the financial savings of a decentralized approach to school management. (MLF)