Current formula funding practices in the South and implications for the future are analyzed. Formula funding systems are used in 12 of the 14 states belonging to the Southern Regional Education Board (SREB). Changes that have occurred in the formulas of each state since 1973-74 are described. Data from 1977-78 academic year are compared to the 1973-74 formulas as reported by Francis Gross. Five basic items or functions are analyzed: instruction, academic support, general administration, and general institutional, libraries, and plant operation and maintenance. The formula coefficient, or "fixed factor," and the degree of differentiation of a formula are analyzed. Results indicate that a movement toward more complex or comprehensive formulas predominated in the SREB states over the four-year period. (SW)