Trying to get more power out of a stock 307 is chasing ones tail. The limiting factor is the heads. The heads have large 74cc chambers so the compression ratio is 8:1. The valves are the smallest of the small block V8 line which is 1.71 inch on the intake side. These small valves are for high torque at low RPM. When they hit 3500 RPM theyre out of breath. You can experiment with spacers, but a open spacers are for high rpm help and since the small cam and small valves are done at 3500 rpm there's no point in trying to help the upper RPM. If it were mine and I wanted more power on the cheap, I would get a set of 416 casting heads off a 305. These have small 58cc chambers that will kick your compression ratio up to 9.5:1, They also have 1.84 intake valves, perfect for the smaller bore of the 307. The ports in these heads are the same size as a 350 at around 160cc. While I was in there I would replace the cam with a Summit racing model as seen here:
Add a double roller timing set and springs to match the cam and a Rochester Quadrajet carb. If you shopped carefully you could pull this off for less than $500 and you'd pick up 30 to 40 horses and 50 to 60 ft lbs of torque plus get better fuel economy. If you can't afford to go that route then I would at least replace the timing chain. If its never been replaced you can bet its shot. Why I would use a Quadrajet is because of its small primaries create high velocity so it developes low end torque quickly and thats what a small cube 307 needs to help get it up and moving out of the hole. THe small primaries of the Q-jet also conserve fuel better.