A school district's reputation and test scores are a badge of honor for many Bay Area neighborhoods and their homeowners, so with the impending release of the 2007 Base API scores, it's important to understand what they mean relative to the previous year's scores.
The tests and the methodology the California Department of Education (CDE) uses to assess the academic performance of its school districts evolve every year, by what they call the "phase-in of new assessments (indicators) into the API" on page 13 of this 73-page PDF explaining the 2007-2008 performance index.
In order to maintain an apples-to-apples comparison, the CDE uses two metrics: the base API and the next year's growth API, both of which use the same tests. That ties the two scores together for comparison. So, for example, you can see how well your schools have improved by comparing the 2007 Base API scores (from spring 2007) with the 2008 Growth API scores (from spring this year). This 2008 Growth API scores will be released in August.
Homeowners and buyers shouldn't compare 2006 Base API scores directly with 2007 Base API scores to gauge the direction of their school district. We need to use API growth over a period of time, as in the chart above. An up-and-coming school district will have positive growth scores over several years, and an elite school district should see relatively little change in that same period.
The hypothetical chart above taken from the PDF document could represent a good school district that worked its way to elite status between 2003 and 2004, and for their homeowners, it probably represents the culmination of a lot of community effort and participation in their children's education.