Reforming the way a state distributes its funding to local school districts is clearly a challenging task. This paper presents the Rhode Island story on school funding reform. First, the paper begins with a short history of Rhode Island's school finance system and the key factors that called for school funding reform. Second, the paper discusses the design, the rationale, and the evidence associated with the new funding formula. Several features of the state's formula are highlighted, including the cost of core instructional services that is grounded in school funding data in the New England region, the need to focus on students who come from low-income backgrounds, a consideration of local fiscal capacity in the context of concentrated poverty at the community level, and the effort to make sure that state funds follow the child when students leave a particular district or move to a charter school. The final section of the paper recaps how the key lessons learned may be applicable to other states that face the need for funding reform in the context of fiscal constraint. In the case of Rhode Island's experience, this paper finds that: (1) Effective leadership widens the policy window; (2) Independent analysis contributes to policy reform; (3) School funding formulas must first serve the student's education purpose and should not assume a need for additional funding; and (4) Accountability and transparency should be institutionalized in implementing the formula. (Contains 4 tables and 4 endnotes.)