The "Getting Down to Facts" (GDTF) studies released in March 2007 offered a clear diagnosis of the issues facing California's education system. Now, as California moves beyond the facts and begins the search for ways to improve the performance of California schools and students, the state faces a critical policy dilemma. On the one hand, the evidence presented in GDTF made it clear that simply putting more resources into California's present education system is unlikely to produce the large gains in performance that Californians expect from their schools. On the other hand, the GDTF studies made it equally clear that bringing about significant improvements in educational performance may require a substantial increase in the resources that the state spends on education, along with increased autonomy and flexibility for local educators to decide how these resources should be used. The policy dilemma that the state faces is how to ensure that local actors use new resources in the best possible ways, without increasing the regulatory burden on schools and school districts or adding to the profusion of categorical funding streams. In Policy Analysis for California Education's (PACE's) view, the solution to this dilemma has two key elements. First, the state needs to focus its reform efforts on creating a system that fosters innovation and learns from experience to support continuous improvement toward the goal of academic success for all students. Second, the state needs to make significant investments in human capital and capacity building at all levels of the education system. The first of these elements--creating a robust and comprehensive data system--is addressed in another PACE policy brief. The second--building a policy framework that supports educators in their efforts to bring about continuous improvement in the performance of schools and students--is addressed in this paper. The authors argue that achieving the challenging goals that Californians have set for the state's students will require educators at all levels to take advantage of increased autonomy and flexibility to find new and better programs and practices. Increased autonomy and flexibility will only lead to improvement if there is capacity at the local level to use new freedoms and resources effectively however, and this capacity is in short supply in California. To support continuous improvement, the state needs to develop incentives to make educators' careers more flexible and attract more educators into leadership roles, and also fund policies that provide educators with the knowledge, skill, and time they will need to improve their own performance.