Virginia Gov. Robert F. McDonnell (R) has proposed that no elementary school student be promoted beyond third grade without knowing how to read, and he’s prepared to offer financial incentives to students who learn.

“This is critically important,” McDonnell said in a news release announcing his $438 million education plan. “If we promote young folks from third to fourth and fourth to fifth grades and do not make sure they can read with a great degree of proficiency we’re doing those young folks a great disservice.”

Bravo to the governor for drawing the line at third grade — even though it would have been even better had he drawn it at first. Nevertheless, as Fairfax County School Board Chair Janie Strauss noted in an interview with WAMU-FM radio on Tuesday, “You really do have to be on grade level in third grade or you really struggle mightily going forward. So that really is an important benchmark year.”

In 2010, the Annie E. Casey Foundation released a report titled “Early Warning! Why Reading By the End of Third Grade Matters.” Failure to read proficiently was linked to higher rates of school dropout and a dramatic decrease in earning potential.

“Until third grade, children are learning to read. After third grade, they also are reading to learn,” said Ralph Smith, executive vice president of the foundation. “When kids are not reading by fourth grade, they almost certainly get on a glide path to poverty.”

According to the foundation report, two of every three fourth-graders are below proficiency in reading and “worse, four of five fourth-graders from low-income families are also not proficient in reading.”

Reading difficulties also contribute to misbehavior at school and at home.

The Web site notes that research has shown a link between “children’s developmental reading problems and a manifestation of aggressive, antisocial and delinquent behaviors.”

Reading difficulties have been found in 85 percent of youths who get in trouble with the law and 70 percent of youths and adults who end up going to jail. About four out of five incarcerated juveniles read two or more years below grade level and a majority are functionally illiterate.

“Reading competence by grade four is one of the best predictors of which student will finish high school, become employable, have a successful adult adjustment and avoid problems with the law,” according to researchers at TeachSafeSchools. “Conversely, children with low reading achievement by grade three have a greater likelihood of school retention, dropout, drug abuse, early pregnancy, delinquency and unemployment.”

A recent analysis of school suspension rates by The Washington Post found that black students in the Washington area are suspended two to five times as often as white students. Staff writer Donna St. George noted “that one of the most common causes of student suspensions are what many call ‘soft’ — or discretionary — infractions: disrespect, defiance, insubordination, disruption and foul language.”

Efforts are underway to find the cause of such widespread racial disparity, including a joint project by the U.S. Departments of Education and Justice to “ensure that school discipline policies and practices comply with the nation’s civil rights laws.”

But don’t underestimate the role of illiteracy and its attendant frustrations. And remember that about 40 percent of black youths are functionally illiterate. That is the real civil rights issue.

McDonnell’s proposed financial incentives for reading received a lukewarm reception from Fairfax Public Schools Superintendent Jack Dale, who told WAMU: “Typically what we look at is how to have kids intrinsically motivated to learn, and typically younger kids are.”

But this is no typical situation. As the Casey Foundation report noted, “75 percent of Americans aged 17 to 24 are ineligible to join the military because they are poorly educated, involved in crime or physically unfit.” We aren’t producing enough qualified high school graduates to meet our national security needs, the report said.

Furthermore, McKinsey & Company estimates that the U.S. gross national product in 2008 “could have been $1.3 trillion to $2.3 trillion higher, if U.S. students had met the educational achievement level of higher-performing nations between 1983 and 1998.”

That makes McDonnell’s incentive plan sounds like a good investment.