Now that the state Court of Appeals has once and for all settled the New York City school finance lawsuit, state and city officials must soon initiate the next necessary discussion, which should prove much more interesting — about what needs to be done to improve the city's schools. The 13-year-old Campaign for Fiscal Equity suit — perhaps the most important national case about school finance — claimed that funding of city schools was inadequate to provide a sound basic education. The additional funding for city schools provided by earlier court rulings once looked like it might reach $5.6 billion per year, but the state's highest court last week held this to just $1.93 billion. If fully appropriated, this would bump up annual per pupil spending by $1,800.