This digest, which is based primarily on the 1989 ERIC/CRESS monograph entitled "Achievement of Equity in Capital Outlay Financing: A Policy Analysis for the States," by D. Thompson G. Stewart, D. Honeyman, and R. Wood, addresses possible solutions to the emerging problem of capital outlay financing, with special attention to facilities in rural areas. Construction and maintenance of school buildings have traditionally depended on local funding. But rural school districts, operating on some of the lowest revenue bases in the country, are often unsuccessful in raising property taxes to meet capital outlay needs. Also, the state-mandated reforms of recent years have placed an additional burden on local budgets, diverting possible resources from capital outlay financing. Recent court rulings have linked capital outlay financing to the established legal premises of adequacy and equity, and have implied the need to provide poor school districts with additional outside funds. State aid for capital outlay has been instituted in 28 states, ranging from full state funding to state or local building authorities, which often seek to involve private enterprise. All forms of such state aid have disadvantages related to loss of local control. Strong partnerships between state education agencies and local education agencies are vital to countering such disadvantages. This digest contains 10 references. (SV)