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A Virginia circuit-court judge has rejected a school-finance-equity lawsuit filed by a coalition of low-wealth school districts in the state.

Virginia's constitution requires the state to provide enough aid to meet "minimum educational standards,'' but not to equalize per-pupil spending between rich and poor districts, Judge Melvin Hughes Jr. ruled last month.

The suit was filed by a group called the Coalition for Equity in Educational Funding, which argued that the wide funding disparities in the state--from $8,000 per student in some affluent communities in Northern Virginia to $3,000 in rural areas--violated the constitution.

Leaders of the coalition indicated they would appeal the decision.


New Jersey lawmakers last week passed a bill to divert money from the state unemployment trust fund to subsidize health care for the poor and uninsured.

The comprehensive health-care package had been developed by Gov. James J. Florio, a Democrat, and the leadership of the Republican majority in the legislature.

Under the bill, about $1.6 billion would be diverted over three years from state unemployment reserves to subsidize health care.

To appease labor unions and other opponents of the measure, the bill includes a payroll tax that will automatically kick in if the unemployment fund falls below $1.5 billion. The current reserve is $2.3 billion.

In return for supporting the bill, the Governor won G.O.P. backing for a companion bill that requires health-insurance companies to offer choices of coverage to small businesses and limits the time insurers can refuse to cover pre-existing conditions.

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