WEST FARGO - Combining various money sources, from trust fund disbursements to payments for oil and coal production, could make North Dakota's school aid payments simpler and fairer, some members of a state commission say.

A proposed $60 million increase in state education aid, which Gov. John Hoeven says he will offer to the 2007 Legislature, should be used both to increase general support for schools and give extra help to districts that are at a disadvantage, members said.

"The key is making sure that districts don't go backward with the formula changes," said one member, Mark Lemer, the business manager for West Fargo schools. "Overall, it has to move them forward - keep them at least where they are today, hopefully moving them forward."

Schools should not get reduced state aid as a result of changes in North Dakota's education finance distribution formula, Lemer said. However, schools that continue to see enrollment decline could lose money, he said. North Dakota's state aid to local schools is based largely on each district's enrollment.

The 13-member state Commission on Education Improvement held its first meeting outside Bismarck on Wednesday, meeting at the West Fargo school system's administrative offices.

The panel discussed an assortment of potential education finance changes, including an increased state aid payment to replace local property tax revenues, no-interest loans for school construction and remodeling projects and state help for districts' special education costs.

Special education expenses represent one-third of the property tax levy for Grand Forks schools, Superintendent Mark Sanford said. "The special ed piece … is an important part of the equity component for everybody," he said.

"That is an area that I think really needs attention," said Wayne Sanstead, the state school superintendent and a commission member.

About 35 people attended Wednesday's meeting, including state legislators and school administrators.

Hoeven appointed the commission as part of a bargain to delay a lawsuit, filed by nine school districts, that challenges how state aid is distributed among schools. It hopes to present a reform package to the next Legislature.

North Dakota law has different methods for distributing state money that benefits local schools, depending on the source of the funds.

For example, the Legislature allocates general aid to education using a formula that adjusts payments according to each district's enrollment and its ability to raise money from property taxes.