Plaintiffs in an Indiana school funding lawsuit, which was put on hold pending the passage of the state's fiscal 1994-95 budget, intend to decide by next week whether to resume the legal action, according to their attorney.

The 40 school districts that filed the lawsuit agreed to stop legal proceedings last August afterGov. Evan Bayh promised that school financing inequities would be addressed by the legislature, according to Marilyn Holscher, an attorney for the districts. The legislature passed the budget June 30, one day before the start of Indiana's 1994-95 biennium.

Holscher said that the districts are currently assessing the impact of the state's budget on schools.

The districts' suit charges that the state's school funding formula is unconstitutional because it results in differences in per pupil spending. Annual per pupil spending among the state's 296 school districts ranges from $2,673 to $5,412.

David Dawson, a spokesman for Bayh, said that the governor "would not be surprised" if the districts resumed the suit because the school funding measures passed by the legislature fell short of Bayh's expectations. In June, Bayh had proposed increasing average annual school aid by 4%, with each school district guaranteed at least a 2.5% increase, Dawson said.

However, the legislature passed a budget for the biennium that increases annual spending for schools by 3.3% and implements a new funding formula that is designed to equalize property tax rates, according to John Grew, a House Democratic fiscal analyst. In addition, all school districts are guaranteed a 1.25% annual increase in state school aid funds, he said.

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