In 1988, there were two United States Supreme Court decisions regarding school finance. One decision upheld the constitutionality of a North Dakota statute regarding transportation fees, and the other decision ruled that interest from state and local government bearer bonds was subject to federal income taxation. Cases discussed in this chapter fall under three major topics: (1) public funds for private schools; (2) sources and allocations of public school funds; and (3) school tax issues. Federal appellate court cases included decisions on issues associated with fund reimbursement, misspent federal funds, allocation of capital expenditures, and the constitutionality of chapter 1 expenditures for mobile classrooms to sectarian schools. State courts litigated cases concerning both substantive and procedural issues related to a state's school finance system, continuance of teacher salary supplements, disputed state aid calculations, school fees, and athletic activity funds. School tax cases dealt with questions associated with assessment, collection, exemptions, uses, elections, and disbursement. (MLF)