The financing of Wisconsin's "Chapter 220" program, which is the primary means for implementing the 1988 federal court settlement of a school integration lawsuit, needs to be reformed. Total program costs may triple in 5 years, from about $32.5 million in 1986-87 to $90 million by the 1992-93 school year; per pupil costs could rise from about $8,700 to more than $10,000. The Wisconsin Legislature enacted Chapter 220 in 1976 to encourage metropolitan school integration in Milwaukee. Financial incentives were included to encourage local district participation. Under existing law, the incentives are paid from state funds that otherwise would be distributed to districts throughout the state. The following cost factors are discussed: (1) the per pupil cost of the city-suburban program is nearly twice the cost of education in the average Wisconsin school district; (2) costs are growing at a rate much faster than student participation; (3) the majority of funds paid to local school districts represent financial incentives that exceed actual education costs; and (4) city-suburban busing costs exceeded $2,100 per pupil in 1986-87, nearly half the entire per-pupil cost of education in the average state school district. Local school officials should work with the governor and the state legislature to develop financial reforms, and the parties involved in the lawsuit settlement might need to modify the agreement to reflect the new financial structure. Statistical data are included on six graphs. (FMW)