New directions in federal educational policy in the 1980s have had clear and consistent implications for state education finance systems. This study reviews the financing arrangements that have emerged during the 1980s at the state level, discusses the costs of new legislative mandates and state programs, and assesses the extent to which federal programs associated with special populations have been taken over by the states and how these programs are funded. Data for the study were derived from U.S. investments in education during the past decade and reform expenditures by states, regions, and the nation, along with questionnaires sent to the finance directors in each state department of education. The following selected results of this data collection effort are reviewed: revenue sources for education from 1980 to the present; state financing of education excellence policies; state financing of special pupil populations; and current systems of revenue distribution across the United States. In addition, the climate of education in the current year is reviewed, and emerging themes and collapsing constraints in education finance policy are considered throughout. Extensive tables and charts are appended, and 62 references and notes are included. (TE)