On October 2, 1989, the Texas Supreme Court, in the "Edgewood v. Kirby" decision, found the current school-finance system unconstitutional. The evolution of this decision, through its early origins, the establishment of the current structure (1949-81), House Bill 72 (1984), and Senate Bill 1019 (1989), is described. Also described are the workings of the Texas school finance system, including funding of local districts, permanent and available school funds, the Foundation School Program (First Tier), Guaranteed Yield Program (Second Tier), and Categorical State Aid. Federal and state court litigation over the school-finance system during the past 20 years is detailed. School-finance proposals in the forms of additional education spending by the state, a countywide tax base, caps on local enrichment, recapture (redistribution) of local revenues, distribution of available school fund, transitional funding, state aid for capital expenditures, changing weights for special programs, dedication of additional money to fund formulas, increased teacher salaries, and school-district consolidation are summarized from various organizations and individuals who have responded to the "Edgewood" decision. Finally, an overview is given of recent school-finance changes in other states, including Kentucky, Montana, and New Jersey. (19 references) (RR)