This paper examines the current system of capital finance for education in New Jersey in light of existing disparities in educational facilities throughout the state and the need to equalize educational quality in response to the New Jersey Supreme Court's mandate in Robinson v. Cahill. Separate sections of the report describe and critique New Jersey's current system of capital finance for education, suggest some of the requirements for an optimal capital finance system, evaluate the relative merits of cost sharing and full state assumption of capital outlay costs with several alternative plans for capital finance reform, and offer specific recommendations for reforming New Jersey's system of capital finance for education. (Author/JG)