Potential revenue prospects for the public schools in the Midwest basically depend on the future outlook for the midwestern economy as a whole. Accordingly, a comprehensive analysis is undertaken of the midwestern economy and tax base, and then of trends in educational spending. Topics include: (1) economic growth and taxation systems; (2) demographic and economic trends; (3) federal, state, and local revenue systems; and (4) state education systems in the Midwest, in general and state by state. The latter includes analysis of declining public school enrollments, shifting sources of school revenues, school expenditures, and finance reform. The study concludes that policy-makers in the Midwest will continue to be confronted with difficult decisions regarding trade offs between cutting public services and increasing taxes. Furthermore, revenue-limiting provisions may make it difficult for states to raise sufficient public service revenues. Accordingly, states are likely to place greater pressure on local governments to increase their share of school financing. A 5-page bibliography concludes the study. (TE)