A report due out today that looks at how the city can best spend billions of dollars more for education, which a court required Albany to provide, will suggest funneling much of the money to the lowest-performing schools and increasing teachers’ salaries.

The report, crafted by a commission created by the speaker of the City Council, Gifford Miller, addresses four main areas: improving low-performing schools, enhancing teacher quality, shrinking the number of students in each class, and establishing an independent office to track the changes and provide feedback.

A draft copy of the 82-page document, the first part of a two-part report, was obtained yesterday by The New York Sun. The commission estimated in the draft that its initial suggestions would cost roughly $2.2 billion if fully implemented.

The 14-member body came up with a targeted approach that may or may not be taken into account when Albany complies with a court order requiring it to phase in increases in annual financing for city schools. It is to reach an additional $5.6 billion by 2009, plus another $9.2 billion in capital spending over the next five years to shrink classes, reduce overcrowding, and improve facilities.

Even if a state appeal of the court ruling in the lawsuit by the Campaign for Fiscal Equity is unsuccessful, it is unclear how much influence the commission will have on how the mayor and the city Department of Education spend the windfall. While the commission bills itself as independent and is comprised of both high-profile education experts and individuals who have spent decades devoted to the ailing city school system, it was created by Mr. Miller, one of four Democrats looking to replace the mayor in November’s election.

Mr. Bloomberg and his schools chancellor, Joel Klein, played no role in the hearings and town-hall meetings that the commission held or in the research it conducted. They are under no orders to follow the recommendations – but they are expected to come under public pressure to do so.

A spokesman for the mayor, Paul Elliott, said yesterday that City Hall could not comment on a report that the administration had not yet seen or been briefed on. The mayor has repeatedly cited education reform as a major accomplishment, which he hopes will help him in his bid for re-election. His opponents say he hasn’t done enough.

The commission is headed by the president of Teachers College at Columbia University, Arthur Levine, and the president of the Community Service Society, David Jones. It outlined what it called a “career ladder” for teachers. The three suggested rungs are novice teachers, career teachers, and master teachers. Each would come with different salary increases and responsibilities, with the greatest incentives going to those who work in the worst-performing schools.

The report calls for raises of 3% for all teachers above what their union negotiations with the city yield. It also adds either 7% or 10% for teachers in the worst-performing schools or for those who reach the top of the performance ladder.

“This is the only way to attract high quality teacher for those less desirable, poor performing schools,” the report summary says.

The idea is embodied in the title of the report. It is called “Fulfilling the Promise: Getting High Quality Teachers Into Every New York City Classroom and Keeping Them There.” That, the report says, is paramount in ensuring that good teachers do not flee to suburban schools where they can make more money and work in an easier environment. In addition to salary increases, it says more job evaluations are needed to ensure that teachers are handling their classes effectively.

The commission also tackles reducing class size, an initiative it estimates will have a price tag of $783.6 million. In kindergarten through third grade it calls for a maximum of 15 students per class in the lowest-ranking schools and 18 in other schools. As students move through the grades to middle and high school, the recommended caps increase a bit, but they would still reduce class size.

Also included on the list of recommendations is the creation of an Independent Office for Research and Accountability. The watchdog office would track changes to make sure they are effective. It would also make “mid-course” suggestions and collect data so that the school system has a body of research to look to.

The goal is to avoid past pitfalls. “There is no comprehensive, ongoing tracking of reform initiatives, and no effort to discover what works and what does not work,” the report says.

Also, it says, what is done in New York City as the Campaign for Fiscal Equity money is spent, if it is successful, will serve as a prototype.

The battle over school funds stems from the lawsuit, filed more than a decade ago, which charged that schoolchildren in the city were not getting the education they were entitled to under the state constitution.

Last summer, after lawmakers at Albany could not agree on how much money to spend on the city’s schools to comply with a court order in the case, the issue was returned to a state Supreme Court judge in Manhattan. Justice Leland DeGrasse appointed special referees and then accepted their recommendation for increases in spending that, in the next five years, would exceed $25 billion.

The president of the city’s United Federation of Teachers, Randi Weingarten, who has a representative on the Miller commission, said the report’s recommendations are the “most thorough” follow-up to the decision in the Campaign for Fiscal Equity case.

“It is probably the most thorough and directly responsive report on the implementation of CFE that we’ve seen,” she said during a phone interview last night. She said she was briefed on the report Thursday but has not yet seen a final draft.

Ms. Weingarten, who has been at an impasse with the mayor over her union’s contract negotiations, said she agreed with the broad parameters of the report. She has called for salary incentives for teachers in floundering schools in the past and said she supports the idea of a laddered system.

She said that the recommendations would not be “easy” to implement because they outline a road map for creating a new kind of school system, but that focusing on retaining quality teachers through more competitive salaries is badly needed. The union president also pointed out that the mayor was invited to have a representative on the panel but declined. He had his own education task force.

In the very first pages of the report, the commission states that the new money has the power to “profoundly improve” education for students but that the improvement will occur only “if we invest it well.”

The second part of the report is to be released this summer, and will focus on leadership, instruction, pre-kindergarten, and several other topics.