Sacramento Bee, November 9, 2003

Schwarzenegger has chosen Donna Arduin, Florida's budget director, to examine state spending (he also named her finance director). He has a mandate to clean house in Sacramento, and he may not have to wait for Arduin's results because a key state audit of education spending was released last week.

Earlier this year, The Bee published a series of articles that detailed the wasteful spending of many of the state's 80 or so education categorical programs, which earmark state funds for specific purposes. These programs received more than $12 billion in 2002-03, and constituted a large part of the general fund education budget of nearly $27 billion. Despite the massive amounts of tax dollars absorbed by these programs, education officials often had no idea where those dollars were going.

In response, a legislative committee authorized the Bureau of State Audits to review the categorical programs. The results show that state oversight and evaluation for categorical spending are wholly inadequate.

While still guaranteeing overall education funding, Schwarzenegger could use the audit's findings to at least change the mix of education spending by moving funds from failing programs to ones that are proven to raise student achievement. He also could transform the categorical funds into block grants, allowing local schools the flexibility to meet the needs of their students rather than following the dictates of Sacramento.

Unfortunately, California's school accountability system is voluntary, and because of quirks in the eligibility requirements, many low-performing schools don't participate in the system. If schools are given funding flexibility, they must be subject to the accountability system's sanctions. These include reassigning staff and reorganizing the school if it fails to improve student performance.

Further, Schwarzenegger should consider that Arduin's former boss, Gov. Jeb Bush, has successfully implemented a school-choice voucher option in Florida. It has worked as a real incentive for public schools to improve.

Lance Izumi is a Senior Fellow in California Studies at the California-based Pacific Research Institute for Public Policy. He can be reached via email at lizumi@pacificresearch.org.