For good public schools and subsidised cycle paths, try Portland, Oregon.
Considering the Economist's story is about America and immigration, here's a little tidbit that's left out of their analysis: the Portland Public School is one of the only (and I believe the biggest) district to have federal funds withheld for the inadequate services provided to English Language Learners (ELLs). This isn't some new development, which makes it all that more concerning. From Betsy Hammond at the Oregonian:
State monitors are upset with Portland's performance because the state notified the district in 2005 that it was violating federal education law. The district fixed the problems to the satisfaction of state monitors in 2006, but when the state checked again in 2009, the district had slipped back into some of its old ways.
And, no, PPS wasn't dodging some NCLB mandates in a way that genuinely helps kids - they were doing a really shoddy job of helping out ELL kids.
Just to add a little more intrigue to the story, guess who was in PPS during part of this time? None other than Gates Education Head, Vicki Phillips. Glad she "fixed" this problem before hopping off to the philanthropy world...