Competition in Education

So I'm wondering...

What is the role of competition in education? I don't mean in the classroom. I feel that there is a time for it and a time when it is best left alone when it comes to my students.

What I'm wondering about is the role of competition between schools for students. Funding, now so tied to the amount of students in a building, is such an issue for all of us. Without the proper funding, we lose programs which leads to loss of opportunities for our students. In a district of choice, such as mine, this is a negative feedback system.

Less students --> less $$ --> less available programming --> less opportunity --> less students
And it continues... So what do we do?

I work in a school that I feel is constantly innovative and willing to bring in new ideas and programs (AIM, IB, Avid, etc) to meet the needs of students and to evolve with the ever-changing landscape of the world and education in particular. Because of this, our numbers remain high while other schools lose out and enter the vicious cycle that I'm talking about. Not that my school has all the answers. We are just one of many such schools in the district with a variety of options and programs making us unique. I'm all for continuing the changes that keep us strong, especially when it is what is best for students. But the effect of what I am seeing is cannabalistic. School pitted against school, pushing the limits of a healthy rivalry. Survival of the Fittest I guess. But how do we fix it?

We constantly fight for equity for all kids, which is why school-of-choice is so important, but does it lead to the very thing that we so badly are trying to battle, the inequality in opportunities for our students? Where do we go?

I have my initial opinions but I'm wondering what others have to say about it.