This discussion begins with the five major political values that were reflected in the 1973 reform of the Illinois school aid system. The lawmakers wanted to spend state dollars for education in a way that would improve student and taxpayer equity, maintain local control of school districts, aid poverty-impacted districts, not discriminate against dual high school and elementary districts, and greatly increase the amount of money the state pays for education. The reform yielded four funding options from which each school district could select the most profitable each fiscal year. The options included the three previous options of the Strayer-Haig system (the "Strayer-Haig Formula," the "Alternate," and the "Flat Grant") plus the new formula--the "Resource Equalizer Formula." The new formula features reward for effort (equal expenditure for equal effort), guaranteed assessed valuation, and consideration of the number of disadvantaged students. A mathematical explanation of the resource equalizer formula, which is currently used in 76 percent of Illinois districts, is presented, as are mathematical formulas for the other three approaches. All the formulas are presented as they have been amended through 1979. (Author/IRT)