Richmond is a workingclass district that sprawls across six incorporated cities northeast of San Francisco. Marks, a charismatic visionary, set out to improve the schools by implementing a choice plan. He created specialty schools, stocking them with costly equipment like computers, musical instruments and microwave ovens for cooking classes. He also hired 300 new teachers and administrators and gave hefty raises to veteran employees. Last December Marks was ousted amid charges that he had spent too much. When the district asked for a state loan, a state trustee’s audit disclosed that in three years Richmond had outspent its $144 million budget by $60 million.

The Richmond schools may be in trouble for years. The reorganization plan calls for laying off up to 500 of the district’s 1,750 teachers. Meanwhile, Gov. Pete Wilson won’t sign any bailout legislation unless the district first suspends its teachers-union contract, which Wilson calls profligate. The union has refused to even talk about such a move.