This report provides a roundup of the rather modest set of actions the state Legislature and Governor Schwarzenegger took on education in 2005. It also sets the stage for what those who care about education might expect in the coming year. To provide some structure for addressing a wide breadth of topics, the report is organized into four sections. Each describes the policy actions taken in 2005 and the ongoing issues that are expected to shape the education debate in 2006. These issues are neither comprehensive nor mutually exclusive. But all reflect the challenges inherent in attempting to create an effective system of public education in which district, state, and federal policies work together to improve the effectiveness of schools and the achievement of students. In California that involves almost 1,000 school districts, over six million children, more than 300,000 educators, and a Legislature and governor who have often been at odds. It is certain that the debates will continue. Clear, effective actions are less of a sure thing. Key issues in 2006 are: (1) High school; (2) The school finance system; (3) Teachers and other personnel; and (4) Accountability.