SACRAMENTO -- California's public schools are fundamentally flawed and need deep changes -- as well as more money -- to properly serve the state's 6.3 million students, according to a report released Friday by a panel advising Gov. Arnold Schwarzenegger.

The report comes as the state is struggling with a multibillion-dollar budget shortfall and as schools are issuing thousands of layoff notices to teachers to cope with the $4.3 billion education cut Schwarzenegger proposed in next year's budget.

Appearing at a news conference in Santa Monica on Friday to announce the long-delayed report, the governor agreed that education needs more money but said any increase would have to wait until the budget was back in balance.

"Everyone in this room knows that education, like other state programs, is going to face severe cuts this year," Schwarzenegger said. He later added, "I realize that providing a first-rate education system means having adequate resources."

Schwarzenegger had intended the report to begin a yearlong focus on reforming California's K-12 system, which he says is failing the state's students. But his efforts have been derailed by his inability to achieve the health reform goals he set last year, as well as the swelling budget shortfall.

Among the high-priced recommendations in the report are universal preschool, full-day kindergarten and more funding to help poor students and those who are still trying to learn English. Half the state's public school students are either poor or struggling with English or both.

The report says the state education bureaucracy should be more efficient and accountable, and that schools should have more autonomy. Teachers should get better training and their pay should be linked to their students' performance. And the state should create a statewide data system to track how well students are learning.

Michael Kirst, an education professor at Stanford University who was not part of the governor's panel, said the report was thorough and filled with innovative ideas.

He said state leaders should keep it handy for when the economy rebounds and declining K-12 enrollments are expected to make more money available for education.

"It should be the first place the public should go to understand what is wrong and how to improve the system," Kirst wrote in a critique of the report. "It is clear, compelling and specific. But it advocates coherent, comprehensive state legislation in a year of large deficits and leftover legislative priorities from 2007."

Saturday is the deadline for school districts to notify teachers and staff they could be laid off later this year.

Teachers and school employee unions expect about 20,000 notices to go out, although they are only preliminary. Districts have until May 15 to tell their employees whether they will have jobs next year.

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On the Net: http://everychildprepared.org/index.php