Gov. Arnold Schwarzenegger promoted an education report Friday that recommends $10.5 billion in new programs, including teacher incentive pay and universal preschool for low-income children, even as he said the state faces a "financial disaster."

Schwarzenegger did not back any particular idea in the Governor's Committee on Education Excellence report he commissioned, but he said lawmakers and other state leaders should consider every recommendation and determine which ones the state can afford in future years.

"It is unfortunate that this report comes out and has so many great recommendations to reform the system … at a time when we have a financial disaster here in California," he said.

The governor's 20-member education panel included local school officials, education experts, former state Sen. Dede Alpert and former Paramount Pictures CEO Sherry Lansing.

"California's current system turns common sense on its head," the committee's report states. "Too often, students are an afterthought."

Among the recommendations:

• Eliminate the existing "categorical" system that provides money based on more than 100 individual programs and replace it with a system that pays on a per-student basis.

• Offer financial incentives to teachers based on improved student performance, new skills and increased responsibilities.

• Move toward universal preschool for low-income 3- to 4-year-olds.

• Expand access to full-day kindergarten and move up the age requirement by three months.

• Give the governor-appointed secretary of education control over the Department of Education.

The governor called Friday for town hall meetings on the report. But with the state grappling with at least an $8 billion shortfall in the next fiscal year, educators said they are doubtful the ideas will gain traction anytime soon.

Schools stand to receive $4 billion less than guaranteed by Proposition 98 under the governor's budget proposal, and education groups have begun to rally at the Capitol as teachers face layoffs.

David Gordon, Sacramento County Office of Education superintendent and a member of the governor's committee, said he thinks the ideas are substantive and necessary. But he said almost anything new will be a tough sell.

"It would be like saying, 'We're going to take you out to this fancy restaurant when we can't afford to buy you a sandwich,'" Gordon said.

Ted Mitchell, former Occidental College president and the committee chairman, said the report is intended to guide the state through the next several years, not as an immediate fix.

Even in a good fiscal year, some of the proposals would be controversial. California Federation of Teachers President Marty Hittelman said his union opposes pay incentives based on test scores.

State Superintendent of Public Instruction Jack O'Connell issued a statement commending the report's call for more school funding, but he said it was a "sad irony" that school districts are laying off teachers and staff as a result of the governor's budget cuts.