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State and local officials in Pennsylvania have agreed to make major changes in the way the state funds programs for abused and neglected children and juvenile delinquents.

The court-approved agreement, announced May 7, settled a lawsuit brought by 67 counties against Gov. Robert P. Casey and a host of other state officials.

Local leaders, faced with skyrocketing costs and growing numbers of maltreated children, sought in the suit to force the state to provide additional child-welfare funding.

Although the state is legally required to pay an average of 75 percent of the cost of those programs, in recent years it has paid only about half, according to the suit.

The counties blamed the state's funding system, which they said failed to take into account the actual need for services.

Under the new agreement, funding for those programs will be tied more closely to demand as reported by counties.

The agreement also calls for the state to help pay, on a graduated basis over several years, the amount of reimbursable costs incurred by counties in 1991 that exceeded their state allocation for that year.

State officials promised to seek an additional $10 million for child-welfare programs over the amount Mr. Casey recommended in his budget plan 3.

The Michigan Senate is considering legislation to impose financial penalties on parents--middle- and upper-income taxpayers as well as welfare recipients--whose children drop out or are truant from school.

The proposal is similar to Wisconsin's "Learnfare" program, which4cuts welfare benefits for families whose teenage children do not attend school regularly.

But Michigan's program, sponsored by Senators Dan L. DeGrow and John J.H. Schwarz, would also prohibit the parents of dropouts and truants from claiming their children as deductions on their state income-tax forms. "We felt this made the program less discriminatory against lower-income families," an aide to Mr. DeGrow said.

The Michigan proposal would cover all school-age children.

The Senate education committee was expected to approve the proposal, which is contained in a package of three bills, late last week.

The Illinois House has overwhelmingly rejected legislation banning corporal punishment in the schools.

The bill, sponsored by Representative Lee Preston of Chicago, was defeated on an 84-to-17 vote.

Critics of the measure argued that decisions on school-discipline policies should be made at the district level, rather than by the state.

Gov. James J. Blanchard of Michigan has released a school-finance proposal calling for the state to increase its share of education funding to 50 percent.

The "50-50 Education Partnership" plan, issued this month, also would amend the constitution to ensure that all profits from the state lottery be reserved for education.

In return for the promise of additional state funding, Mr. Blanchard said, the plan would require districts to guarantee that students receive the skills necessary for employment.

The plan also restates Mr. Blanchard's call in his State-of-the-State Address to limit increases in property-tax assessments for the schools to no more than the inflation rate.

Gov. Gaston Caperton of West Virginia has appointed a task force to develop long-term goals for the legislature's upcoming special session on education.

The 20-member committee includes six lawmakers, the presidents of the state's two teachers' unions, and several other educators. Mr. Caperton said the group will study a wide range of issues, from preschool education to adult literacy.

According to the Governor's spokesman, the commission will present a list of goals to state leaders at a June education summit.

As part of an agreement ending a 12-day statewide teachers' strike in March, legislative leaders promised to ask Mr. Caperton to convene a special session to consider a comprehensive funding plan for education. Mr. Caperton has said he will call the session by the end of August.

Massachusetts' Employment and Training program has not been effective in moving welfare recipients into jobs, a new study concludes.

The program provides basic education and job training, day care, and other services aimed at enabling recipients to become self-sufficient.

The study argues that many of the 67,000 program participants who found jobs between 1984 and 1989 would have done so even without the program's assistance. Given its costs--a total of $324 million in state and federal funds over the period--the program thus has failed to deliver the substantial savings to the taxpayers claimed by program adherents, the study maintains.

The study calls for several changes, including making the program mandatory rather than voluntary, shifting to less-costly informal day care, and aiding all welfare recipients rather than just those most likely to find relatively high-paying jobs.

"Work and Welfare in Massachusetts" was written by June O'Neill, a professor of economics at Baruch College, City University of New York, and published by the Boston-based Pioneer Institute for Public Policy Research.

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