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Although states' end-of-year balances are expected to be slightly larger at the end of fiscal 1989 than earlier predictions, they will still be "well below" 5 percent of expenditures, the recommended cushion against revenue shortfalls or economic downturns, according to a new report.

The study by the National Governors' Association and the National Association of State Budget Officers found that the 50 states will end the current fiscal year with a total of $9- billion in reserve funds, which would represent 3.5 percent of expenditures. Last October, the groups predicted that ending balances would represent only 2.5 percent of expenditures.

End-of-year balances are expected to drop to 3 percent of expenditures in fiscal 1990, the groups projected. "The 1990 figure is the lowest balance in total state reserves since the major recession year of 1983," the report noted.

It also found that state nominal spending in fiscal 1989 is expected to increase by 8 percent, exceeding revenues by more than $1.8 billion. If state budget-stabilization funds are taken into account, expenditures would still exceed revenues by $1.2 billion.

Wisconsin voters last week re-elected Herbert J. Grover to a third, four-year term as state superintendent of public instruction.

In his campaign, Mr. Grover pledged to work for improved early-childhood education, greater family involvement in schools, more accountability in education, and safer schools.

In recent weeks, the superintendent has also leveled sharp criticism at Gov. Tommy Thompson's statewide open-enrollment proposal and a related bill that would let Milwaukee parents send their children to any public or nonsectarian private school in the city.

Mr. Grover easily defeated Arlyn Wollenburg, a writer and former educator.

Republican lawmakers in Illinois and Texas have introduced bills that would enable students to attend the public or private school of their choice by providing them with vouchers that could be used to defray tuition costs.

The Illinois proposal would take the $120-million increase in state school aid proposed by Gov. James R. Thompson and split it among the state's 2 million students, providing each with a voucher worth about $60.

The Texas proposal would provide private-school students with vouchers worth $2,500 that could be applied towards tuition.

A companion proposal introduced by House Republicans in Texas would allow parents to send their children to any school within their school district, rather than their neighborhood or zoned school.

Senate Republicans in Indiana have altered a major education bill backed by the state's Democratic governor to satisfy the concerns of the Republican state school superintendent.

Gov. B. Evan Bayh's "Project Excel," which cleared the House last month, underwent several revisions when it was adopted by the Senate education committee. The full Senate was expected to vote on the measure this week.

Addressing concerns raised by Superintendent of Public Instruction H. Dean Evans, the panel scrapped a proposal by Governor Bayh to direct $8 million in funding for "at-risk" children to preschool education. The panel also voted to add two parent-teacher conference days to the 180-day school calendar at cost of $20 million a year.

The committee also scrapped the Governor's plan to create an autonomous licensing board to set standards for the teaching profession, voting to replace it with an advisory committee that would provide guidance to the state board of education on the issue.

The Senate panel kept intact a $10 million "performance awards" program favored by Mr. Evans that the House had voted to merge with a "challenge incentive" grant initiative proposed by Mr. Bayh.

In a separate measure, the Senate education panel adopted a change sought by Mr. Evans that would toughen the passing requirements for statewide standardized tests, a move that would have the effect of qualifying more students for remediation.

Alaska school boards would have to negotiate with teachers over class sizes and workloads, under legislation passed by the House.

The measure calls on boards to negotiate class-size issues in good faith, but would not require boards to accept union demands for reductions.

The bill faces an uncertain future in the Senate, said Greg Giles of the Association of Alaska School Boards. The association and the Alaska Council of School Administrators oppose the measure.

"It's a budget buster," Mr. Giles said. He added that the bill would erode local control over education.

The National Education Association-Alaska argues that the bill would not increase costs and would make school boards give more consideration to issues of importance to teachers.

The South Carolina Senate has approved legislation that would exempt high-achieving schools from many state regulations.

Schools would be granted greater flexibility if their students' scores on two sets of standardized tests in two of the previous three years placed them in approximately the top quarter of schools with similar socioeconomic characteristics.

Districts achieving the goal would be exempted from rules on class scheduling, structure, and staffing.

Vol. 08, Issue 29

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