It’s common knowledge that many states aren’t straight shooters when it comes to reporting high school graduation rates. All too often, grade inflation rules the day, making a mockery of federal accountability provisions and masking our dropout problem. U.S. Secretary of Education Margaret Spellings has had it with state obfuscation, and is upping the ante with threats of a new federal mandate.

In an interview with the Associated Press last week, Spellings cited a need for “truth in advertising,” critiquing slipshod graduation formulas replete with inaccuracies and distortions. Federal intervention may be imminent if Congress doesn’t move to force state fixes to our data debacle, warned Spellings.

Spellings’ comments come on the heels of a highly-publicized Johns Hopkins study calling one out of every 10 U.S. high schools a “dropout factory.” Not surprisingly, the factory label was most repugnant to those who actually earned it, prompting charges of faulty data; interestingly, some North Carolina high schools on the dreaded list received high marks for graduation rates on recently-released state report cards.

Clearly, then, North Carolina’s graduation formula still has some kinks; even with its flaws, though, it’s a huge improvement over past data. The state released its first four-year cohort graduation rate in February, 2007, tracking students who entered in ninth grade and left with a diploma four years later. Thus configured, our overall graduation rate is now 69.5 percent – in line with independent, credible estimates. Prior to implementing cohort data, North Carolina reported implausibly high graduation rates of up to 97 percent (.pdf), eliciting derision and disbelief from outside researchers.

Fortunately, about 12 states in all have embarked on efforts to revamp graduation rate calculations. New methodologies reflect state attempts to make good on a compact signed by the nation’s governors in 2005 to implement a “standard, four-year adjusted cohort graduation rate.”

Still, too many states continue to cling to the beguiling comfort of inflated graduation rates. In a 2006 interview on National Public Radio, Alliance for Excellent Education President Bob Wise noted, “There are some states that have found literally over 20 ways to take somebody out of that calculation,” in their attempt to sugarcoat graduation numbers.

Why are states so disinclined to embrace reality? One reason is that the federal No Child Left Behind (NCLB) law requires states to report graduation data as a measure of adequate yearly progress. Faced with the prospect of federal sanctions, many states have chosen to shade the truth.

Current Congressional proposals to reauthorize NCLB would tighten school accountability for graduation performance, but prospects for the law’s renewal this year are dim. Legislative modifications to NCLB will likely have to wait until 2008.

What should we do? Spellings rightly diagnoses our need for reliable, consistent data in the form of cohort graduation rates. States have already promised to do this, and they all need to deliver. We can’t remedy our educational maladies if we don’t know what they are.

But more top-down, government involvement in the form of yet another federal mandate is not the answer. NCLB legislation – though well-intentioned – has already drastically expanded federal involvement in education, spawning a host of perverse incentives for states to “game” the system and whitewash poor performance. This is not transparency.

If we want states to do a better job with our high schools, we must first let federalism reign supreme. Eugene Hickok, a former deputy secretary at the U.S. Department of Education and key architect of NCLB, agrees, and is calling for pulling back on high-stakes federal intrusion and returning policymaking authority to the states. Doing so, says Hickok, would “protect academic transparency” on state accountability measures and would “begin to restore citizen ownership of American education.” In a nation full of disaffected, disengaged high school students, that’s exactly what we need.