1976 saw a number of major fiscal changes occurring in New Jersey, all of which had an impact on educational funding. These include the imposition of a state income tax, a property tax rebate program, and a new system of funding public education that significantly increases the state's share of total education support. Based on a measure of the fiscal burden faced by the residents of New Jersey communities developed for this study, calculations indicate that on an average the state's larger urban communities face a fiscal burden more than four times greater than the fiscal burden in the average nonurban community. Detailed analysis of the impacts of the new tax and school funding legislation reveal that, in general, urban communities receive preferential treatment. However, the magnitude of this preferential treatment is insufficient to have a large impact on the relative fiscal position of urban as compared to nonurban communities within the state. (Author/PGD)