California Challenge: Avoid 'Dysfunction' in Resolving Budget

Education—and virtually all other government priorities—took a back seat to the state's fiscal crisis as Gov. Arnold Schwarzenegger used his Jan. 15 State of the State speech to push lawmakers to end a deficit stalemate that threatens to paralyze state operations.

Already, the current-year budget deficit of more than $14 billion has led the governor to propose such cost-saving measures as shortening the school year by five days, increasing class sizes, and suspending a grant program designed to help low-performing schools.

With the deficit expected to swell to more than $40 billion in the next 18 months, the governor warned lawmakers that new initiatives in education—or anything else—are stalled until the state...