"Overall, you can see how it affects quality in many areas in Hawaii," said Craig D. Jerald, project director for Education Week newspaper's "Quality Counts" report.

Here's how Education Week marked Hawaii compared to the rest of the United States.

Funding adequacy: Grade D-, second-worst in the nation. Hawaii was one of only four states where per-pupil spending declined between 1985 and 1995, when adjusted for inflation. And the 1995 per-pupil figure of $4,724 was $817 below the national average when adjusted for regional cost differences. But with the state Legislature facing a budget shortfall of $170 million, hopes are not high for a major increase. New Jersey did best in this category, earning an A.

Funding Equity, gauging whether money was shared fairly among schools: Grade A. Hawaii set the standard for the nation because of its unique, single school system. In other states, schools are generally funded by property taxes, with disparities depending on the wealth of the city.

Allocation, or whether money was well-spent: Grade C. The report said 62 percent of Hawaii's education money went to classroom instruction, 1 percent above the national average, and the state did fairly well when it came to education technology. But having 21 percent of schools in need of major repairs hurt. Georgia did best here, with a B.

Teaching: Grade D, the lowest of any state. Sixty-seven percent of Hawaii's high school teachers held degrees in the subjects they taught, better than the national average, the report said. But 12 percent of all public school teachers in 1994 had temporary, emergency or no licenses, the worst in the nation, it said.

Also, Hawaii offered no incentives for teachers to seek national board certification, had the lowest percentage of new teachers from colleges accredited by the National Council for Accreditation of Teacher Education, and neither required nor funded an induction program for new teachers. Kentucky had the best grade, a B.

Danielle Lum, spokeswoman for the Hawaii State Teachers Association, noted that many of the report's criteria were beyond teachers' control, a fact Jerald acknowledged.

For example, most new teachers come from the University of Hawaii, which is accredited but not by NCATE. Charles Araki, interim dean of the UH College of Education, said NCATE accreditation would be "ideal" but that it would take major funding to improve UH's facilities enough to earn it.

Don Nugent, state Department of Education personnel director, dismissed the poor grade as "baloney," saying the high number of uncertified teachers was due largely to a chronic shortage of special education instructors. Hawaii's high costs and relatively low pay makes attracting them difficult, he said.

Jerald agreed, noting that Hawaii's public school teachers have the lowest pay in the nation, when adjusted for the cost of living.

Standards and assessments: Grade B. Hawaii earned points for adopting statewide standards in core subjects, using a variety of tests to assess students, publicly reporting test scores and participating in national tests used to compare achievement. But it was knocked for not making the standards graduation requirements and for not penalizing or rewarding schools based on achievement. New York had the highest grade in this category, an A.

School climate: Grade D+. Hawaii got marked down for having too many overcrowded schools and big classes. For example, 46 percent of Hawaii elementary teachers had fewer than 25 students, while in Vermont - which got the best score in this category, a B+ - that figure was 87 percent. Local education officials say Gov. Ben Cayetano's plan to increase funding for school construction the next two years would help.