This report summarizes the proposed budgets for U.S. public elementary and secondary education for fiscal year 1998 and describes the budgets and the major factors that influence those budgets. It is the second in a series of "State Fiscal Briefs" on education finance by the Center for the Study of the States. The report is primarily based on information collected from governors' fiscal year 1998 proposed budgets. Other sources of information include state education departments, state budget and finance offices, "Education Week," and "State Tax Notes." The data suggest that many of the final FY 1998 state education budgets will be nearly identical to those proposed by the governors earlier this year. State elementary and secondary school budgets for FY 1998 propose an estimated increase of 5.9 percent in overall spending. Nine governors have made proposals to reduce property taxes. The Texas and New York property-tax-cut proposals are the most comprehensive, but they will likely be changed by their respective legislatures if action is taken this session. Enrollment is estimated to increase about 1.4 percent nationally, though the Far West's will increase 2.7 percent, fueling increases in spending. Five tables and three figures are included. (Contains 19 endnotes.) (LMI)