The Davis administration spent nearly $17 million on lawyers and legal costs to defend the unacceptable: poorly managed and badly funded public schools. Its response to the parents and students in schools with broken toilets, inexperienced teachers and crowded classrooms: Fire your school board members; it's their fault.

Now, Gov. Arnold Schwarzenegger has made the right decision. On his behalf, Education Secretary Richard Riordan is trying to settle the lawsuit against the state that the American Civil Liberties Union of Southern California filed four years ago on behalf of dozens of schools in predominantly poor, urban areas.

If no settlement is reached, the suit will go to trial this summer.

Backing its claim that schools are both inadequately and inequitably funded, the ACLU has submitted studies documenting the lack of textbooks, decent facilities and experienced teachers in predominantly minority schools. Although Gov. Davis and the Legislature added billions of dollars for education in the late '90s, programs like smaller classes in early grades compounded the shortage of veteran teachers and of classroom space in poor areas.

Several factors now favor a settlement. For all its faults, the federal No Child Left Behind Act is pressuring states to place certified teachers in every classroom. And there's Riordan, who, as Los Angeles mayor, advocated more money for poor schools.

Riordan champions replacing the crazy-quilt system of program grants with a ``weighted formula'' giving more per-student aid to children in poverty or with disabilities -- a method that should appeal to the ACLU. (One version adds money for students in high-cost areas, which would be favorable to Silicon Valley.)

But any settlement before summer probably would be contingent on carrying out whatever promises are made. Schwarzenegger has yet to name appointees to the Quality Education Commission, which will set the base level of funding for schools and consider Riordan's formula. The Legislature also would have to agree.

The ACLU and Riordan may face a philosophical divide. The ACLU has argued that the state has the duty and ultimate authority to force schools in line. Riordan favors a decentralized approach, in which school principals control how money is spent and who's hired and fired -- a position that could pit them against teachers' unions.

Neither side will talk about the state of negotiations, but it's a good sign that the ACLU's lead lawyer and Riordan together toured schools in Edmonton, Canada, which implemented the changes that Riordan favors.

Enacting reforms and settling the suit are inseparable. That's why a deal could be good not only for low-income students but all students.