Before revising the No Child Left Behind (NCLB) legislation under the new administration, policy makers need to be informed as to whether or not the NCLB labeling formula adequately distinguishes good-quality schools from poor-quality schools. This study tests this question, using rich descriptive data for Milwaukee's urban school district (MPS). Alternative indicators of school quality, the NCLB subgroup test failure measure and a standardized testing proficiency measure, are used as comparison measures to illustrate the discrimination embedded in the current formula used by the Department of Education. (Contains 4 tables, 1 figure and 9 notes.)