Schwarzenegger wants to shift the cost of public education from the state to the local level as it was prior to the 1960s. The problem this shift back in time creates is that the state also took substantial tax revenues away from locals during that same period.
Prior to the rise of the state in the 1960's, local governments received most of their revenues through sales tax, property taxes and service fees. As the state took larger and larger portions of sales and property taxes local governments began cinching their belts. Expansion of property taxes was denied after passage of Prop 13.
Both the legislature and Schwarzenegger are proponents of big government. What the electorate must accomplish if they allow Schwarzenegger to force local governments to pick up more of the tab is to force the state to also surrender some of the loot (tax revenues).