This report sets up a structure for examining the real costs of public education. It defines three approaches of gathering and reporting cost information: narrow (salaries and current expenditures, excluding capital outlays); generally accepted accounting principles (GAAP) (costs are recorded during the period in which they occur); and broad (all inputs in the system, including time, are measured). The paper's aim is to develop a better measure of the cost of public education in three Ohio school districts, and to establish that public schools in Ohio's three largest districts are suffering from rising costs combined with falling achievement. The document discusses education achievement in the three areas and examines enrollment as a measure of quality. It found no meaningful relationship between overall spending per pupil and student achievement. It states that more solid structures of school organization may be obtained from voucher systems, charter schools, tax credits for tuition payments, and other programs that link rewards directly with parent satisfaction. The text emphasizes that a real program of school choice that gives parents and students more options will instill necessary incentives for improvement in the public schools. Four appendices list GAAP estimates of expenditures, problems with proficiency examinations, and other concerns. (Contains 50 references and notes.) (RJM)