Legislation sent to the governor's desk Monday allows school districts to increase class sizes slightly without the state yanking all of their class-size reduction funding.

Pushed by school administrators pleading for more financial flexibility, the measure is nearly identical to legislation vetoed by former Gov. Gray Davis.

Lawmakers and district officials are hoping for a new outcome with Gov. Arnold Schwarzenegger.

"I think the governor is aware of the importance of class-size reduction," said Vivian Castro, director of governmental affairs for the Los Angeles Unified School District. "I think he would like to give school districts as much flexibility as possible to be able to weather the storm."

The state's class-size reduction program helps districts reduce the number of students in kindergarten through third-grade classes, but school administrators say the program doesn't pay the entire bill of hiring additional teachers and providing classrooms. Some districts have found they can save money by hiring fewer teachers for smaller classes and forgoing extra state funds.

Just last week, the superintendent of the Livermore school district recommended scrapping class-size reduction efforts to bring the district's budget in line.

"We see it really as providing the added flexibility to keep the program intact," Castro said of SB 311 by Sen. Byron Sher, D-Palo Alto. The bill was sent to the governor Monday on a 29-2 vote of the Senate.

Under the measure, districts that exceed the 20-to-1 pupil-teacher ratio will lose only a portion of state funds, rather than than the full $18,000 per class in current law. Classes could average nearly 22 pupils over the course of a year without losing the entire amount.

With the added flexibility, districts will be freer to do what is best for the child, Castro said. Currently, students might be placed in a first-and second-grade combination class or bused to a school farther away, rather than be the 21st student in a first-grade class.

Assemblyman Darrell Steinberg, D-Sacramento, said the bill represented a good compromise.

"It basically equates a proportional loss of funding based on how much you vary" from the 20-to-1 ideal, Steinberg said.

Davis sought to hold the line on class sizes. "By relaxing the penalties for infractions of the class-size limits, this bill would only serve to provide fiscal incentive to reduce the educational benefits of the current program," Davis wrote in his October veto message.

Schwarzenegger's office did not return calls seeking comment on the legislation.

Mike Weimer, a lobbyist for the California Federation of Teachers, said giving some funding flexibility is better than schools laying off teachers and not participating in the program.