California could become the first state in the country to stop using the IQ test, if state schools chief Bill Honig has his way.

The move, which Honig recently called for in the midst of the state`s budget crisis, would save hundreds of thousands of dollars. And it would come as California once again pleads its case in the courts after two decades of legal battles over the cultural validity of IQ tests.

''IQ tests don`t help you decide what to do with the kids,'' said Honig.

''So you know the kids` IQ-but that doesn`t tell you what you need to do to help them. It`s basically a wasted expense and it gets people off track.''

The controversy in California began in 1971, when a lawsuit was filed against the state on behalf of five black children whose parents charged the tests were racially and socioeconomically biased. In 1979, U.S. District Judge Robert Peckham agreed and barred the state from giving the test to black children being considered for classes for the mentally retarded.

But in 1988, California`s public schools returned to court-this time to contest a suit by a different group of black parents who charged the state discriminated against their children by not letting them take the test in special education evaluations. Last month, a federal court granted an exception to two students, allowing them to take the test. But, as the case continues, the court still must decide whether all black students being considered for special education should be able to take the test.

Behind California`s legal dispute lies the broader question of whether IQ tests are needed at all.

Every state uses IQ tests to evaluate whether children should be placed in special education classes. Some also use the test to evaluate students for gifted classes.

Although California is the only state that bars IQ tests in evaluating black children for special education purposes, the test has been controversial since its inception.

Developed in France in 1905, IQ tests originally were used to identify students who needed extra help. The first racist charges came in 1910 when W.E.B. Du Bois began a campaign against the use of the test on blacks.

Such charges still are being heard-most heatedly in California. Cinthia Schuman, director of FairTest, a nonprofit organization that is an outspoken opponent of all standardized testing, gave an example from the Wechsler Revised test.

Children are asked questions such as: What do you call a baby cow?

For an inner-city child who has never seen a cow, ''baby cow''-the wrong answer-comes to mind rather than calf, Schuman said.

But changing individual questions can`t solve the pervasive cultural bias in the tests, said Laura Schulkind, an associate at Public Advocates, a San Francisco-based nonprofit law organization that has joined with the state`s counsel in opposing the tests` use with black students.

''The danger is giving people the impression that the problem with the test is specific questions and if you weed out those questions, it`ll be OK. It won`t be OK,'' she said.

The extent of that bias was the basis of arguments in the first suit against California. Attorneys for families who brought the suit provided evidence that an alarming number of black students were being placed in classes for the ''educable'' mentally retarded after scoring below 70 on the test. (Educators have said the number was 10 times that of any other racial or ethnic group.)

Judge Peckham ruled with the parents in California, but judges in similar court battles in Illinois, Florida and Georgia have ruled that black children still could be given IQ tests in special education evaluations because it would be biased to bar one group from taking the test.

Honig`s problems with the test have as much to do with its cost as with its cultural validity.

Honig`s strongest opposition is likely to come from the California Association of School Psychologists.

But even within the school psychologist community, there is disagreement. ''We don`t have an official position on whether IQ tests should be banned, but we can show with strong evidence that other methods can be used to identify students with learning and behavior problems,'' said Dan Reschly, former president of the National Association of School Psychologists and director of the school of psychology graduate program at Iowa State University.