CHICAGO The governor and state school superintendent of North Dakota last week outlined a plan for reforming school funding in the wake of legal challenges to the present system.

Gov. Ed Schafer and superintendent Wayne Sanstead said the state's plan for elementary and secondary schools will identify "phased-in strategies to enhance quality, increase efficiency and ensure quality," according to a press release from the governor's office.

The two officials have agreed that the plan should expand the ability of high schools to tax land, local responsibility for transportation. and state funding for both small districts and direct instructional services.

The final plan, which will address the question of equalized school funding among districts. will also contain a "hold-harmless" provision that would prevent wealthier districts from losing more than 2% of their financing per year.

In January, a split decision by the North Dakota Supreme, Court in a case contesting the constitutionality of the school funding system gave the state a reprieve from being forced to create a new system. However, the high court made it clear that future challenges to the present funding system could be successful, according to Ron Stastney, the assistant state school superintendent.

"That was a warning shot across the bow, telling us we better start doing something about the equity issue." Stastney said.

Rick Collin, the governor's communications director, said that Schafer wants to work with the legislature and education officials in drafting a comprehensive school funding plan next year.

"We'll see something unveiled before the legislative session begins in January," Collin said. Other areas of discussion outlined by Schafer and Sanstead include exploring ways to increase per-pupil funding.

In 1989, nine school districts filed suit against North Dakota, Charging that the school funding system was inequitable and relied too heavily on local property taxes. In February 1993, the South Central District Court ruled that the system unconstitutionally discriminated against students living in poorer districts.

While three of the state's five Supreme Court justices voted to uphold the lower court ruling, state law requires the assent of four justices to change a law.

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