The legislation is modeled after a similar system in Florida created by former Gov. Jeb Bush to give parents and the public a clear indication of how schools are doing. The grading system would tie into the state's recently approved federal waiver from the No Child Left Behind law.
"In Florida, [the grading system] was different -- it was a letter grade supposedly to be synonymous with the student grade and it's still like that down there," said Cartersville Superintendent Howard Hinesley, who previously was superintendent of a Florida school system. "In Georgia, through the waiver system, has Alert schools, Focus schools ... and you fall into these categories based on what's going to be a rubric based on test scores, attendance, the [College and Career Ready Performance Index] that [State Superintendent John Barge] has put into place, will put [schools] in one of these categories.
"One of the categories is basically you're doing a great job, Focus and Alert group means you have some problems -- graduation rates being one -- but there is multiple criteria."
Hinesley said in Florida, schools received an A, B, C, D or F grade.
Deal last month told a commission charged with overhauling education funding that he wants to shift from simply funding enrollment growth in school districts to handing out money for accomplishments. The state is developing a program that ties teacher pay to student performance under its federal "Race to the Top" grant, but Deal said he wants to broaden that.
"There is a tendency to simply put money back where it has historically been and in the same form and fashion in which it has historically been allocated," Deal told the group as reported by the Associated Press. "How we allocate that money says a lot about whether we are simply satisfied with status quo or satisfied only when we see changing results."
The education finance commission -- composed of state lawmakers, teachers, school administrators and business leaders -- began meeting in June 2011 after the Legislature passed a bill calling for the state to study education funding. It is tasked with updating the state's education laws, known as Title 20, and rewriting the formula used to determine how much money school districts receive from the state, called the Quality Basic Education formula.
Title 20 and the funding formula haven't been revised in more than 20 years. Former Gov. Sonny Perdue created a similar commission but the group did little to change education funding in Georgia.
On Thursday, Deal signed a battery of legislation that came out of the commission's work last year, including one bill that repealed outdated sections of Title 20 and legislation that changes the funding formula to give more money to the state's poorest districts.
One measure puts the state -- rather than each individual district -- in charge of keeping up with home school students. Another piece of legislation sets a minimum student ratio for school nurses and dedicates more state funding for the jobs, marking the first time the state has called for basic guidelines for hiring nurses in schools.
One change recommended by the commission that didn't pass the Legislature this year was a bill repealing a law that requires districts to spend at least 65 percent of their budget in the classroom. Many lawmakers balked at tossing out the rule, even though cash-strapped schools say the policy hamstrings how they spend their already limited funding.
The rule also doesn't cover some critical parts of educating students, such as librarians and guidance counselors.
"There's a reluctance from members of my own party to admit we actually made a mistake a few years ago," said Senate Education Committee Chairman Fran Millar, a Republican from Atlanta. "The time will come when people are robbing Peter to pay Paul."
Georgia lawmakers passed the so-called 65 percent solution in 2006 during a national push to make sure schools were spending taxpayer dollars in the classroom -- not the principal's office -- to help boost student performance. Georgia and Texas were the only states to formally adopt the rule last decade. It has since been overturned by state lawmakers in Texas.
The commission also has looked at revising a law that prohibits the use of personal electronic devices by students in the classroom, an outdated statute that was written long before laptops and notebook computers were ubiquitous in classrooms.
The group has said it wants to increase how much money the state spends on school transportation from $130 million to $150 million. That money would pay for school bus drivers' salaries, drug testing, liability insurance and some operational costs.
Final recommendations from the commission are due by September.
-- The Associated Press contributed to this article.