No empirical studies have attempted to explain why states invest differentially in their research and in their non-research universities, although these differences hold important implications for students, postsecondary systems, and society. Deploying a form of hierarchical-linear modeling, our study examines across-state variation in state appropriations allocated to public four-year universities, and the distribution of these appropriations to Carnegie research universities relative to other non-research universities. The analysis suggests that a primary reason why some states "privilege" their research universities is because the research universities in these states tend to engage in more expensive types of activities than do their non-research counterparts. Our analysis, however, points also to certain political influences that tend disproportionately to benefit research universities, including the proportion of appropriations committee members in a state legislature that graduated from the institution. These findings evidence the need for a closer examination of the link between state-policy outputs in higher education, the characteristics of legislative committees and of the individuals who serve on them. (Contains 6 figures, 3 tables, and 8 endnotes.)