This paper describes the current and proposed systems for state and local financing of public education in Illinois and discusses the ramifications for local educational planners of a change from a foundation level program to a resource cost model approach. The paper begins with a brief historical overview of the finance reform effort that began in Illinois in 1981. The next section of the paper describes the foundation level program used in Illinois, identifying the variables used in the formulas and noting their interactions and their potential impact on educational planning. The paper then covers the relationships among resource cost, resource quantity, and local community preference as these affect local district fiscal needs. Particular attention is paid to the Program Cost Differential process that identified 139 different educational programs and their resource needs. The resource cost model is computationally more complex than the foundation level approach, is enrollment-driven rather than attendance-driven, leaves variables that are critical subject to revision, and requires expansion of accounting and reporting operations. Appendixes detail the appropriate resources identified for elementary and secondary programs, provide forms for calculating resource costs, clarify the specification of resources for district level administration, and display cost of education indices for selected school districts. (PGD)