At an unusually emotional meeting Tuesday, the state arts council denied published charges that it steers too much money to a small number of politically connected North Jersey arts groups.

But the council announced it will examine the fairness of how it awards taxpayer money to arts groups.

A key part of the review will be to determine whether ethics laws should be strengthened for council members serving on the committee that gives out grants.

No timetable was set for the review, and it has not been determined whether it will be made public, said Leonard Fisher, chairman of the New Jersey State Council on the Arts.

"We feel that we do maintain the highest standards of integrity, but we want to be sure that there are no appearances of any kind that would impugn the integrity of the arts council," he said.

He said he is "satisfied" that council members refrain from discussion of grants for any groups they have served.

About 58 percent of the $14 million awarded in general operating grants last year went to 10 organizations. Of those 10 groups, eight had former or current members of the arts council on their boards.

The council also released a written opinion from the state Attorney General's Office that said the council's method of splitting money between North and South Jersey arts groups was a "reasonable interpretation" of state budget law.

The law says cultural projects in South Jersey should get 25 percent of the council's money. But during the past four years, the council has given $2.1 million of South Jersey's share to North Jersey and statewide groups to put on shows in the South.

State lawmakers from Camden, Burlington and Gloucester counties have vowed to rewrite the law next month, so that money earmarked for South Jersey stays in the region.

More than 75 people attended the meeting at the Kirby Theatre at Drew University. Drew's president, former Gov. Tom Kean, received a standing ovation from the crowd when he said state funding for all the arts in New Jersey was " shameful."

No governor increased funding for the arts as Kean did during the 1980s.

"I read the newspaper," Kean said, referring to articles in the Courier-Post and the Star-Ledger of Newark. South Jersey is feuding with North Jersey, he said, big arts groups are fighting with small ones. "When the pie is so small, people are going to fight over pieces of it and that fighting helps nobody," he said to loud applause.

The DiFrancesco administration is recommending that the council receive about the same amount, $20 million, it got last year.

Secretary of State DeForest Soaries Jr. followed Kean. Soaries has promised to give close scrutiny to the council' s funding policy as part of a review he is scheduled to finish by June 1.

Soaries was greeted by polite applause.

When he told the council anticipated surplus funds had evaporated and winning increased funding for the arts will be difficult, the room fell silent.

"When the economy has a cold, the arts get pneumonia," Soaries said.

When Fisher asked if anyone had questions for Soaries, there were only a few muffled coughs from the audience.

In sharp contrast, Assemblyman Nicholas Asselta, R- Cumberland, told the council that he thought South Jersey arts groups were funded fairly.

Arts council funding in Asselta's sparsely populated county totaled $647,630 in fiscal year 2000, nearly double the $331,700 received by all the arts groups in Camden County.

The arts council is doing "a fantastic job," he said, and council members rose from their chairs on the stage to give him a standing ovation.

The council will meet today in Cumberland County to continue the discussion of its funding practices with members of the South Jersey Cultural Alliance.