A NUMBER OF ORGANIZATIONS STUDYING CALIFORNIA'S PUBLIC SCHOOLS, FOUND THEY LAG BEHIND ALMOST EVERY OTHER STATE IN STUDENT ACHIEVEMENT, FUNDING, TEACHER QUALITY AND FACILITIES. RECENT REPORTS FROM THE RAND CORPORATION, EDUCATION TRUST-WEST, AND THE HARVARD UNIVERSITY CIVIL RIGHTS PROJECT, (AMONG OTHERS) SUGGEST THAT A COMBINATION OF FACTORS HAVE CONTRIBUTED TO AN ALARMING DEGRADATION OF THE STATE'S SCHOOLS OVER TIME. ONCE AMONG THE BEST IN THE NATION, NOW CALIFORNIA URBAN HIGH SCHOOLS WERE LABLED ``DROPOUT FACTORIES.'' THE CAUSES OF THE PROBLEMS INCLUDE FACTORS FROM BUDGET CUTS TO A LACK OF POLITICAL WILL. THE REPORTS CONTEND THAT THE GOVERNOR'S PROPOSAL (TO PAY TEACHERS ACCORDING TO MERIT, RATHER THAN SENIORITY) HARDLY SCRATCHES THE SURFACE OF THE PROBLEMS. CALIFORNIA RANKS ABOUT 42ND, OUT OF 50 STATES IN PUBLIC EDUCATION SPENDING. DEMOCRAT LEON PANETTA CALLED THE CURRENT WAR OF WORDS BETWEEN SCHWARZENEGGER AND TEACHERS' UNIONS, COUNTERPRODUCTIVE.