Business Gives Public Schools Failing Grade : Education: A survey of executives shows overwhelming support for restructuring the system. Plan would make schools, students more accountable and reward excellent teachers.

California business leaders believe the state’s public education system is failing and four out of five support a “comprehensive restructuring” of the way schools are run, according to a newly released survey by an influential business lobbying group.

The California Business Roundtable on Wednesday forwarded the results of its survey to Gov. Pete Wilson along with its own proposal for change--a plan that suggests making schools and students more accountable for their progress, rewarding excellent teachers and establishing a greater link between schools and employers.

Wilson reportedly made no promises to the group’s leaders but said afterward that he shares their outlook.

“We have to be very much concerned about our ability to remain competitive,” he said.

The survey of 836 executives from companies with 100 or more employees, conducted in September, was an attempt by the Business Roundtable to assess attitudes about the state’s economic climate, its government and institutions.

Although the questionnaire found executives more upbeat about California than respondents to similar nationwide surveys, there were signs of discontent, said Thomas C. Sutton, chairman and chief executive officer of Pacific Mutual Life Insurance Co.

One of every seven companies surveyed, and 25% of manufacturers, said they planned to relocate all or part of their business outside California, Sutton said. Among the problems cited by those firms and others were the costs of housing, labor and health care in California.

More than two-thirds said state government has had a “bad effect” on their operations, with the Legislature getting the worst marks--66% negative--and the office of former Gov. George Deukmejian getting the best reviews--24% positive, 25% negative and the rest reporting that Deukmejian had no effect on their businesses.

Asked to rank the need for 10 potential state policies, 85% of the executives favored increasing the supply of water, while 83% supported a comprehensive reform of the education system.

At the bottom of the list were two suggestions for changing the health care system, with 33% favoring a proposal to require businesses to provide health coverage and just 20% supporting a taxpayer-financed health care system for all.

The business leaders met privately for nearly two hours with Wilson and his Cabinet secretaries for business and education.

Sam Ginn, the chairman and chief executive officer of Pacific Telesis, told Wilson that 60% of the company’s job applicants cannot pass a basic exam that is keyed to a seventh-grade education.

“We need workers with skills that will allow us to be competitive into the next century,” Ginn told reporters. “Those aren’t skills that we’re getting out of the public education system.”

Ginn and the others presented to Wilson an education plan that Ginn said would shift the focus of school policy from requiring certain activities, such as a list of courses or subject areas. That system would be replaced by one that stressed student achievement and frequently tested their ability to meet statewide standards.

Ginn said the group favors more parental involvement, merit pay for teachers and competition among schools, including giving parents the right to select which public school their children attend.

He also suggested that California examine the German model under which high school students are tested and then routed either to college courses or job training, with those in the vocational program required to split their week between work and school.