My state has a more rational state law. For more than twenty years now, all public schools anywhere in the state offer open enrollment to all students anywhere in the state, up to the limits of the capacity of each school district to receive students.

http://education.state.mn.us/MDE/Academic_Excellence/School_...

Funding of course is based on enrollment.

http://www.house.leg.state.mn.us/hrd/pubs/mnschfin.pdf

More students means more enrollment, so school districts make efforts to provide attractive programs that will bring students across district lines. This competition among school districts has promoted innovation in programs and resulted in a fair amount of interchange among students who live in different neighborhoods. For example, the first public school program for "highly gifted" students in our state

http://www.invergrove.k12.mn.us/atheneum.html

began precisely because the offering district knew it could build a program that would attract in new students to the district (which was losing student population because it was in an inner-ring suburb with an aging population). That district enjoyed such success with its program that soon other school districts set up similar programs.

http://www.springlakeparkschools.org/schools/la/la_lighthous...

http://department.services.bloomington.k12.mn.us/modules/cms...

http://www.minnetonka.k12.mn.us/ACADEMICS/NAVIGATORPROGRAM/P...

And the main point is that school districts don't just compete with programs for "highly gifted" students, but also with programs for fine-arts-inclined students, or students who desire language immersion programs (Spanish immersion and Chinese immersion programs are both hot programs in Minnesota), and students with many other characteristics. Some school districts gain almost half of their enrollment from open enrollment, and correspondingly some of the historically worst school districts in Minnesota have lost large percentages of enrollment to families crossing district boundaries to look for better schools. (Minnesota also has a huge number of charter schools, which is a distinct form of competition for publicly subsidized students, but they cannot offer some of the programs that public school districts can.) This competition keeps all districts accountable for providing a good learning environment, and helps change the psychology of teachers and principals dealing with families from one of treating learners as a burden to one of treating learners as an opportunity to be grateful for.

Any other state in the United States could do the same, and a few already have.

http://educateiowa.gov/index.php?option=com_content&task...

http://www.ecs.org/html/offsite.asp?document=http%3A%2F%2Fww...