The state is counting on districts abandoning the class-size reduction program to help  bail out the state budget this year and next.

Gov. Schwarzenegger’s proposed budget assumes that it can save $340 million this year and an additional $200 million next year, because districts will find themselves too pinched to accept the state subsidy. The state’s declining expenditure is a cagey form of a cut.

For 14 years, the state has provided money – up to $1,071 per child – if school districts agreed to a maximum of 20 students per class for kindergarten through third grade. This year, the Legislature loosened the rules, and agreed to pay a partial subsidy for classes with up to 25 kids.

But the subsidy doesn’t cover costs even at that ratio; the program, while popular with parents and teachers, is also expensive for districts. Many districts have been backing out – at first one grade at a time, and lately exiting it altogether. According to  survey by California Watch last fall, two thirds of the state’s largest school districts have already increased  class sizes, with some schools going to 30 students per class.

Class-size reduction is a categorical program, meaning that districts can only spend it for a dictated purposed. The Legislature has suspended controls over about one-third of categorical grant money,  giving districts freedom to spend it how they see fit.

Lawmakers should do so for class-size reduction, giving all districts equal dollars to spend on small classes, an extended day, summer school or whatever they can demonstrate leads to student achievement.  Instead, the state is giving districts an unaffordable option and reaping the savings.