Forty-six percent of Washington's state operating budget is devoted to K-12 education. This paper provides an overview of key features of Washington's school finance system. It examines sources and levels of revenues and expenditures for K-12 public education and outlines major principles of Washington's revenue distribution system. An examination of interdistrict equity of state aid distribution during the period 1974-94 reveals three emerging equity issues: (1) increased dependence on local revenue sources; (2) unknown extent to which local revenues fund basic education services; and (3) the challenge of aligning the state's finance system with the provisions of the statewide education reform effort. Additional information regarding sources of revenue and distribution is current through 1999 projections. The paper examines general and categorical revenue generation for special-education programs, Learning Assistance Programs (LAP), Transitional Bilingual Education, and school construction. Revenue distribution is looked at with respect to guidelines for distribution to school districts, the Levy Lid Act, Levy equalization aid, and distribution of state equalization aid. Emerging equity issues and their relationship to property wealth, and local levy funding, are also examined. (RIB)