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New Jersey school administrators have been briefed by the state attorney general's office on the expansion of an undercover drug operation that last month netted three dozen arrests at six high schools.

Operation Deterrence, the code name for the undercover probe, was undertaken after a tougher state law aimed at school-related drug transactions took effect last summer.

The investigation has involved the use of state troopers posing as students and may, in its expanded version, deploy the drug agents as teachers, custodians, and other school personnel.

In addition to normal criminal penalties, the new law imposes a mandatory three-year prison sentence for drug sales or possession within 1,000 feet of a school or school bus. It also includes penalties for selling drugs to minors and for using minors in drug-distribution rings.

Thomas Cannon, a spokesman for the state attorney general, said the troopers had been posing as students since September. Educators at the schools involved were aware of the program, he said, although most did not know the identity of the undercover officers.

Of the 36 people arrested last month, 26 were students. The arrests came as the result of the troopers' either purchasing drugs from the suspects or observing them in the act of completing drug transactions.

According to John Haggerty, also a spokesman for the attorney general's office, the meeting this month with school officials and representatives from county attorneys' offices focused on how the program could be expanded to other school districts. The groups will develop guidelines for when law-enforcement officials should be summoned to school buildings for drug-related incidents.

The guidelines will lead to written agreements between school officials and county-based narcotics forces, according to Mr. Haggerty.

A declining farm economy, disappointing levels of high-school achievement, and the prospect of a severe teacher shortage are putting increased pressure on North Dakota's small and rural schools, according to a new study.

The study, conducted by the Mid-Continent Regional Education Laboratory as a guide for state policymakers, argues that a steady decline in both student population and tax revenue will force many smaller districts to consolidate in coming years.

Those that remain, it says, will need to develop more cooperative measures to deliver programs they cannot afford to offer alone.

"We can't expect to do more the way we have been doing things in the past," said Clarence Bina, director of special programs for the state education department.

According to Mr. Bina, the research group worked with the department to develop an "environmental scan" of each school system, taking into account the educational, economic, and demographic factors that affect academic performance.

The study is part of North Dakota's first attempt to involve all state agencies and education interest groups in the process of developing a comprehensive plan for future policy, said the state superintendent of public instruction, Wayne Sanstead.

The department has formed nine task forces to consider the report's conclusions, Mr. Bina said, and plans to eventually submit recommendations to the legislature.

According to Mr. Bina, 67 percent of the state's school districts have fewer than 250 students. While North Dakota ranks high nationally in academic achievement in the early grades, he said, high-school scores are considerably lower, a trend he attributed to the lack of resources in many smaller schools.

Calling Vermont's special-education funding system "antiquated, inefficient, and unfair," a commission appointed by Gov. Madeleine M. Kunin has concluded that it should be replaced with a new one that adequately serves all students with special needs.

"Educators want a funding formula based on the actual level of services available and which gives predictability to local budget-making," the commission states in a report presented to the Governor late last month.

The three-part system recommended by the panel would include: block grants based on the number of teachers, administrators, and specialists needed to meet state standards; reimbursements for expenditures above the block grant; and payments for extraordinary services.

California's superintendent of public instruction has urged school officials in the state to turn off refrigerated drinking fountains until the water in them has been evaluated for lead content.

In a letter to district and county supervisors last month, the state school chief, Bill Honig, responded to recently released federal research data showing that the lead content in electric water coolers may be unacceptably high, posing a particular danger to young children, who are more susceptible to the physical and mental effects of toxicity.

Mr. Honig said school officials should work with local water authorities to make sure their water is safe, and suggested that they provide alternative sources of drinking water for students and staff members until the analysis is complete.

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