Indiana's school funding formula was developed in response to a lawsuit challenging the state's educational system's constitutionality. A reward-for-effort formula sets each school corporation's per-pupil noncategorical revenue, general fund property tax rate, and percentage of state aid. Funding for alternative education is planned for 1997. (MLH)

The Education Improvement Act instigated funding allocation reform, equalization and equity, system accountability, systemwide report cards, value-added assessment, and governance reform. The most dissatisfied educators are those in large, wealthier urban systems. Horizontal equity, accountability, and test results have improved throughout the…