To save money, Gov. Arnold Schwarzenegger proposes that students accepted by California's public universities be given a choice to instead voluntarily attend community college for two years, free of charge.

His idea hints at the huge but hidden subsidies paid by all taxpayers for students at California State University and the University of California -- subsidies enjoyed even by children of the rich.

Roughly, taxpayers have been spending $9,600 per year per UC student, $8,000 per CSU student and $4,500 per community college student. If Californians paid the entire bill for university-bound students to instead attend community college for two years, they'd save about $10,000 per UC student, and $7,000 per CSU student.

Think about these fat subsidies, mostly for the middle-class. To finance a typical education -- which can include a costly fifth year because of foolish policies that let undergraduates linger -- Californians subsidize about $40,000 per UC student, and $30,000 per CSU student.

It's time to ask what we get.

CSU officials just announced that 58 percent of 38,086 entering freshmen couldn't handle basic English and math. The 23,000 students were "not proficient" on tests that would barely challenge a seventh-grader.

These freshmen earned B's in high school. It seems their B's were inflated by teachers incapable of actually educating teens hobbled by the anti-skills malaise infecting the middle schools.

So let's understand: We fund universities to tutor freshmen in remedial skills, even as we heavily subsidize these students to struggle in college courses they barely grasp.

CSU says 82 percent of its lagging freshmen from 2002 learned remedial math and reading in a year -- almost a miracle. Yet many doubt this, because CSU doesn't retest the students using the test they flunked.

Instead, the faculty generally decides if they have succeeded in bringing the students to proficiency -- the same horrifically subjective formula that fueled almost comical grade inflation in California for 20 years.

Murray L. Galinson, vice chairman of CSU's board, says the 82 percent success claim "wouldn't pass the smell test."

Why would CSU engage in the same grade inflation that, in effect, betrayed our struggling high school grads by handing them fake B's?

Adult politics. At Cal State University, Northridge, math reformer and professor David Klein says CSUN watered down remedial courses after minority studies professors complained they were unfair to minorities.

"These professors demanded that we have a higher passage rate for students out of remedial classes, and they won," says Klein.

UC and CSU utterly fail at another job: training future teachers. Both give lip service to reforms mandated by the state Board of Education, such as a return to phonics in grade schools. But most UC and CSU campuses quietly fight reform, led by ossified professors who train future teachers in discredited theories and failed methods.

And you're paying for it.

California Education Secretary Richard Riordan says teacher colleges "are probably the worst thing about California public education. The teacher colleges produce certified teachers who can't teach."

CSU's freshmen are sad proof of what happened when teachers relied on teacher college fads including whole language, bilingual education, "fuzzy" math, the self-esteem movement and so on.

One problem is that skills such as arithmetic are rejected by many teachers as "drill." Prof. Klein blames UC and CSU teacher colleges who hammered that view into teachers.

At CSUN, Klein is required to allow the use of calculators during finals. "My students who are going to become middle-school teachers leave CSUN unable to do long division or to multiply. Then they go off to teach math to teenagers -- but can't do it."

Teens in industrialized Asia and Europe have charged far past California teens, who are mired in "hands-on" math and science, which skirts many skills. Says Klein: "Even China's and India's students are going to surpass California's because of the skills they emphasize -- while our teenagers play with colored bars and make recipes."

This year, California will spend $2.87 billion on UC and $2.62 billion on CSU even as their teacher colleges continue to do kids harm.

Schwarzenegger must focus his energy on these tragic teacher factories. It's not just a budget obligation. It's a moral obligation.

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Jill Stewart is a print, radio and television commentator on California politics. She can be reached via her Web site, www.jillstewart.net.