This book is designed to provide public officials, leaders of organizations concerned with school funding issues, and citizens active in educational affairs with information about the political, economic, and equity issues that underlie the school finance reform debate in New York State. It discusses present inequities and potential approaches to resolving school finance problems, paying particular attention to how to fund urban schools within the overall context of statewide fiscal equity and to the tradeoffs within the political and economic constraints facing the state. The introduction information about the political, describes the background for reform. The chapters which follow are (1) "Levittown v. Nyquist: Setting the Agenda for Reform," (2) "Political Factors Affecting Reform," (3) "The Economic Environment for Reform," (4) "New York State Education Aid Policy: The Formulas and Their Impact," (5) "Measuring Fiscal Capacity and Tax Effort in Urban School Districts," (6) "The Finance and Provision of Special-Needs Programs," (7) "Options for Reform: The Building Blocks," and (8) "Options for Reform: A Prototype and its Implications." The book includes the following appendices: (1) Mathematical Explanation of New York State Education Aid Formulas; (2) The Basic Prototype Formula; (3) Prototype Formula: Stage 2; (4) Prototype Formula: Stage 3; and (5) Simulation of School District Expenditures. (CG)