There is a great guest post over at A Keyboard and a .45 by Peter W. Wickham, Jr. about what is needed to fix our education system.
My suggestion to permanently fix the problem is to take away the public schools' authority to tax and make them earn their money the old-fashioned way by satisfying the customer.
In order to raise funds they will have to collect fees from those who actually use their services. If a parent/customer chooses not to send her child to the school, that school receives no money. When a business fails to accommodate its customers' wants and needs, it loses it customers. When the customers leave, they take their money with them. Without any funds coming in, a business usually goes out of business. The threat of starvation is as good a motivator as the desire for profit and will drive people to improve their service to others. This is what the public schools need and need badly.
Go check it out. And while you are thinking along these lines. . . There is another site called Alliance for the Separation of School and State. It is worth a read.