SACRAMENTO (AP) - A law targeted for repeal by Gov. Arnold Schwarzenegger as part of his plan to change parts of state education spending survived an attempt to eliminate it in a Senate committee Wednesday.

Schwarzenegger had sought the repeal of the law, which requires school contracts for landscaping, busing and other services to protect workers' wages and salary, saying it prevented schools from spending their money more efficiently.

But the Senate Education Committee voted 6-4 to defeat the attempt by Sen. Bill Morrow, R-Oceanside, to repeal the law. Morrow's bill, written with school administrators, was intended to give administrators more flexibility and let them stretch their limited budgets.

The law, written by Sen. Richard Alarcon, D-Los Angeles, was approved by the Legislature and signed by former Gov. Gray Davis in 2002. It applies to contracts signed after Jan. 1, 2003.

Repealing it could save schools as much as $500 million a year, if districts were allowed to sign contracts for busing, maintenance, landscaping and other services, Morrow said.

When school districts pay more, that money "comes out of the hides of our children," Morrow said.

Schwarzenegger also cited budget concerns when he highlighted the law in his Jan. 6 state of the state speech.

Alarcon said he doubted the estimated savings, adding that the law doesn't keep districts from saving money by privatizing as long as they don't do so by laying off workers or cutting their medical benefits and sending them to state-funded health programs.

"It sends a message that if you're going to reduce costs ... first, prove it, and second, don't create other taxpayer costs by creating unemployment," he said.

Sen. Jack Scott, D-Altadena, a former college administrator, said he would support repealing the law because "it ties the districts' hands. If it didn't, you wouldn't find school districts unanimous in their opposition to this law."

Introduced last year, Morrow's bill does much of what the governor wants but it isn't Schwarzenegger's proposal, said Darrell Ng, a governor's spokesman. Schwarzenegger will introduce his own proposal soon, Ng said.

Law supporters, who expect to keep fighting repeal, were encouraged by the Senate committee's vote, said Dave Low, assistant director of government relations for the California School Employees Association.

Alarcon's law ensures that school districts show the savings from contracting out, and that it doesn't rely on cutting health benefits or wages for workers, said Low, whose group represents 220,000 classified school employees, including maintenance workers, bus drivers and cafeteria servers.

Morrow called the law a "power play" by public employee unions who had an easy time pushing it through a Legislature controlled by Democrats and a Democratic governor.

"But private union employees were gored, and most of the private transportation companies are unionized," he said.

The committee also defeated a bill by Sen. Ross Johnson, R-Irvine, that would have suspended the law for two years, as well as other requirements, including monitoring prevailing wages for construction projects.

Jim Fleming, superintendent of the Capistrano Unified School District, said the two-year suspension would have allowed school districts to save money.

That bill failed on a 3-7 vote.