ALBANY - A bipartisan panel of Senate and Assembly members on Friday recommended a $1.1 billion increase in school operating aid.

The proposal would increase aid that schools use for

daily operations by 6.9 per-

cent.

Gov. George Pataki has proposed a $634 million increase in current school aid, which is about $16 billion.

Total education spending

will likely be more, said Assembly Education Committee

Chairwoman Catherine

Nolan.

She said negotiations continue on additional education proposals including the Assembly's proposal to provide $100 million to expand pre-kindergarten programs.

All school districts would see more state aid under the panel's proposal, with high-needs districts getting larger shares.

“You would reasonably expect that all the ships will be raised,” said Senate Education Committee Chairman Stephen

Saland.

New York City schools would receive a substantial share of the money.

But the share to New York City and other school districts won't be known until computer analysis of the total figure is completed this weekend, Saland and Nolan said.

Nolan said the panel's proposal would be a good start to responding to a court decision made Thursday on education funding.

The state Appellate Division directed Albany to spend $4.7 billion to $5.63 billion extra on the annual operating budgets for the city's public schools, phased in over the next four years.

A week ago, the Democrat-led Assembly proposed a $1.1 billion increase in operating aid and the Republican-led Senate proposed a $1.023 billion increase.

The panel's compromise will go to the general conference committee of top legislative leaders Sunday.

That committee plans to try to complete the Legislature's budget proposal, pass budget bills early next week, and pass a legislative budget by the April 1 deadline.

The Legislature will still have to try to negotiate a final

state budget with Pataki, who has the upper hand in bud-

get-crafting under the constitution.