This yearbook's focus is the connection between state responsibility and local control. Its purpose is to analyze the evolving balance between state responsibility for funding K-12 education and local autonomy in operating these schools. The goals of this analysis are twofold; the book seeks to characterize how this relationship has changed, both in terms of the policy initiatives undertaken and the resources committed. The book undertakes to explain why the intersection between the states' role and local prerogative has shifted so rapidly in the last 2 decades. Any full understanding of K-12 resource allocation must include a detailed knowledge of what is happening to state and local relationships and how these new arrangements influence the evolving balance between state responsibility and local autonomy. The introduction sets out the central themes around the interplay between local control and state activism. The taxonomy of state activism developed in the introduction provides one way to characterize forms of state activism on the basis of both the fundamental social values they reflect and the approach used to implement them. Other sections examine the philosophical, historical, legal, and political forces that have been responsible for the shift from local to state initiative. Chapters include an examination of the tension between the competing ideals of liberty and equality as it has played out in the courts, an exploration of the broad national and international institutional forces influencing recent state activism, and an examination of locally controlled revenue sources. (Contains 56 references.) (DFR)