A LOCAL TAX ALLOCATION CORRECTION FACTOR WAS DEVELOPED AND EVALUATED FOR APPORTIONMENT OF STATE SCHOOL FUNDS. THE PILOT STUDY WAS BASED ON A PAPER PRESENTED TO THE SIXTH NATIONAL CONFERENCE ON SCHOOL FINANCE (SPONSORED BY THE NATIONAL EDUCATION ASSOCIATION). IN THE FIRST PHASE OF THE STUDY, A STATISTICAL METHOD FOR ALLOCATING LOCAL PROPERTY TAX RESOURCES BETWEEN PUBLIC SCHOOLS AND OTHER LOCAL GOVERNMENTAL SERVICES WAS DEVELOPED. BY USING THIS METHOD, A CORRECTION FACTOR WAS DERIVED FOR USE IN COMPUTING STATE SUPPORT FOR LOCAL SCHOOL SYSTEMS. IN THE SECOND PHASE OF THE STUDY, DATA WERE OBTAINED AND CORRECTION FACTORS COMPUTED FOR ALL U.S. CITIES OF 50,000 OR MORE POPULATION AND FOR COUNTIES IN SELECTED STATES. IN THE THIRD PHASE OF THE STUDY, CORRECTION FACTORS WERE APPLIED TO THE APPORTIONMENT OF SCHOOL FUNDS IN CALIFORNIA, FLORIDA, ILLINOIS, AND NEW YORK. THE PURPOSE OF THESE APPLICATIONS WAS TO DETERMINE HOW MUCH CHANGE WOULD HAVE OCCURRED IF THE CORRECTION FACTOR HAD BEEN USED IN THE APPORTIONMENT OF STATE SCHOOL FUNDS, AND TO ASSESS THE IMPACT OF THESE CHANGES. IT WAS FOUND THAT THE CORRECTION FACTOR TENDED TO PROVIDE RELIEF PRIMARILY FOR LARGE CITIES. FINDINGS DID NOT INDICATE THAT THE CORRECTION FACTOR SHOULD BE USED GENERALLY IN STATE SCHOOL SUPPORT PROGRAMS. PRACTICAL DIFFICULTIES WHICH WOULD BE ENCOUNTERED IN IMPLEMENTATION WERE DISCUSSED. (JM)