This report examines factors that contribute to the differences in local education funding, per pupil revenue, and local resident ability to support present and future educational services in West Virginia. Based on a variety of data generated during 1989-92, the study indicates: (1) the differences in support for local education are attributed to property values, the mix of property classes, and voter approval of the excess levy; (2) Class III and Class IV property values generate the regular and excess levy revenue, and account for 83 percent of local support for public schools; (3) neither the ability of local residents to pay taxes nor revenues from excess levies are included as components of the measurement for local share of the state basic education program; (4) property values and resident ability to pay taxes are only weakly related; and (5) the large differences in local education funding per pupil revenue between the highest ranked school district and the lowest ranked school district is partly due to the state's use of property tax as the single measure of local fiscal capacity. Because the State contributes 66% of the average local revenue, the bias introduced by the property-tax measure for local fiscal capacity is significant; counties with relatively high property tax revenue but low incomes are severely disadvantaged by such a single index measure. Suggestions about using a composite index are proposed. Appendices include definitions of factors examined in the study, a summary of West Virginia's school financing system, and two data charts. This report also contains 21 tables and charts. (Contains 11 references.) (LP)