ALBANY -- Buffalo and other upstate school districts anticipate a large increase in state aid as a result of Tuesday's recommended 44 percent increase in operating aid for the New York City schools.

A court-appointed panel recommended that New York City schools get an additional $5.6 billion a year in state aid, phased in over a four-year period. Though the panel's plan deals only with aid to New York City schools, state officials have long agreed that other districts would not be left out. Buffalo's ailing schools would be among the biggest beneficiaries outside of New York City under any statewide plan, officials say.

An advocacy group that won the lawsuit that led to Tuesday's recommendation thinks that Buffalo should be in line for a 32 percent increase in aid if the state's political leaders embrace the New York City plan as a formula for the state.

"We are committed to a statewide remedy," said Michael Rebell, executive director of the Campaign for Fiscal Equity, which brought the lawsuit.

New York City's schools should get an additional $5.6 billion a year in state aid over the current $12.6 billion level to help ensure "a sound, basic education," the court-appointed panel said. The panel is recommending that the increase be phased in over four years. During that period, the city school system, which serves 1.1 million students, would get an additional $14 billion.

Besides the operating aid increase, the panel said, the New York City schools should see an additional $9 billion for school construction projects by 2010.

The state school budget this year is about $15.5 billion. Backers of the decade-old, landmark lawsuit think that the proposed funding plan could drive an additional $3 billion in annual aid to 517 districts outside of New York City that were not a part of the lawsuit but that have been identified by litigants as underfunded. There are about 700 school districts in New York.

The Campaign for Fiscal Equity earlier this year said 28 districts in Erie County are underfunded. It said that under its plan, Buffalo's school budget should rise from $486 million in 2001 to $690 million this year.

The New York City funding plan was developed by a court-appointed panel created after Gov. George E. Pataki and state lawmakers failed to come up with their own plan, despite the state's highest court ordering them to act.

A state judge who ordered the panel's report is expected to embrace much of its contents by sometime in January. That gives a small window for current negotiations between the state and stakeholders to craft a solution before the judge, Leland DeGrasse of Manhattan, imposes one. The court panel, which wants its ideas implemented 90 days after DeGrasse's order, called for the added funding to be part of the 2005 school year.

The recommendations, though, left unanswered a key question: Who would pay for the big funding increase? It did say the state can make New York City kick in some of the funding -- an idea that likely would be pressed upon other districts under any statewide solution. But the court panel made clear that the lion's share of the increase should come from Albany.

"While money is surely not all that matters, there is a direct and strong correlation between adequate funding and the ability of a local school district to fulfill its education mandate," the three-member panel said Tuesday in its 59-page report to DeGrasse.

The recommendations far exceed the $1.9 billion annual aid increase the Pataki administration proposed but match the level urged by the Campaign for Fiscal Equity.

Proponents of increased funding said all districts, especially those that are poor and underperforming, stand to benefit. "We're confident lawmakers will pass legislation to have it applied to their districts throughout the state," said Philip Rumore, president of the Buffalo Teachers Federation, a member of the group that filed the funding lawsuit.

The New York State School Boards Association, whose members would benefit financially, quickly embraced the funding plan. Its executive director, Timothy Kremer, said that it would be "unthinkable" that Pataki and lawmakers "would leave children from other high-need school districts out in the cold. It is up to them to apply any reforms adopted regarding New York City to the entire state."

Kevin Quinn, a Pataki spokesman, said the administration is still trying to broker a plan that avoids a court-imposed mandate. Quinn said Pataki is "particularly concerned" that the recommendations do not offer any "real reform" to the funding system while calling for massive increases in aid. "We continue to believe a statewide solution is needed and that these decisions should not be left to the court, but should be made by elected representatives of the people," Quinn said.

One senior lawmaker, Assemblyman Steven Sanders, D-Manhattan, chairman of the Assembly's Education Committee, said that there should be enough money in the $102 billion state budget to find the $1 billion to $2 billion aid increase he expects will be required next year for all schools statewide. "We need to do this urgently, and we need to do it on a statewide basis," Sanders said.

But one advocate said that some tax increases may be needed by the state. Regina Eaton, of the Alliance for Quality Education, said any such increases in state taxes would come after years of Albany's shifting the school tax burden to local property taxpayers. "There should be a shift back to the state," Eaton said. "Increasing broad-based taxes will spread the pain around a little bit more."

In June 2003, the Court of Appeals, the state's top court, said the state was failing to provide a sound, basic education, which it defined as one that prepares students "to function productively as civic participants." Citing an unfair funding formula for determining state aid, it talked of a "systemic failure" of New York City's schools.

The court gave the state until the end of July 2004 for Pataki and lawmakers to determine the cost of providing a sound, basic education, how to implement reforms to the funding formula system, and to create accountability standards.

Pataki, who fought the lawsuit in court, and the Legislature did not meet the deadline,

Within days, DeGrasse appointed former Fordham Law School Dean John Feerick and two retired appellate division judges, E. Leo Milonas and William Thompson, as referees to do Albany's work.