CHILDREN in Massachusetts' property-poor neighborhoods are being denied the quality education of students from wealthier communities with a broader tax base.That's the conclusion of a coalition of education activists, who criticize Massachusetts' school funding system as unfair. At a press conference last week, they announced plans to continue a legal challenge against the state. The coalition, called Council for Fair School Finance, represents the interests of plaintiffs from property-poor communities named in a lawsuit originally filed against the state in 1978. The suit challenges the constitutionality of the state's system for financing public education through property taxes. Massachusetts funds only 25 percent of the statewide costs for public schools and ranks 49th of all states on the percentage of funds it allocates for public elementary and secondary education, said Norma Shapiro, president of the council. "From the start, we recognized that this commonwealth had the greatest disparities in spending of any state in the country," said Ms. Shapiro. "And today we can find children in every corner of the state who are being denied equal opportunity and an adequate education." Bob Blumenthal, counsel to the Massachusetts Department of Education, says the state constitution does not mandate the state to provide an equal education. He also says his office is working on restoring more state education funds to end inequities within schools. "We're fighting for a restoration of funds in fact beyond the previous levels," he says. The suit, which has never gone to trial, will be heard by a single state Supreme Court justice Oct. 9. The case has been put on hold twice since the passage of new school finance reform legislation which provided education grants to poorer communities. The case was refiled in 1990 when the grants were cut as part of the state's budget-cutting initiatives. School finance has emerged as a national issue with nearly half the states being challenged over inequities in their schools. In recent years, the public education finance systems in Texas, Kentucky, New Jersey, and Montana have ruled unconstitutional. In Massachusetts, inequities have been more pronounced due to recent local aid cutbacks prompted by a state budget crisis. Bay State school superintendents from property-poor communities say their schools have been hit hard. Gerald Kohn, superintendent of a regional school district north of Boston, says one elementary school he oversees in Rowley received a national award from then-President Reagan for its educational reform efforts. But today, he says, the school is much different. "Today we have no library," Mr. Kohn said. "We have no computer education. We have no gifted and talented education. We have no money for textbooks, equipment. No money for capital improvements, no money to cut the grass." Jonathan Kozol, author of the new book "Savage Inequalities: Children in America's Schools," expressed support for the group and its legal battle against the state. In writing his book, Mr. Kozol said he visited more than 30 public schools throughout the country over the past two years and found the most pronounced inequalities in Massachusetts schools. "In no other state in the USA is inequality more obvious, more glaring, or more inexcusable than here in Massachusetts," he said. "We have an undeserved reputation for progressive politics." Mr. Kozol said that many of the state's underfunded schools serve predominantly black and Hispanic children. "Far from living up to the promise of Brown [v. Board of Education], the state has yet to live up to the promise made 100 years ago in Plessy v. Fergusen," he said. "Many of our schools are separate, but none of them are equal."