In this document, the authors review emerging innovative practices in a number of States and recent research which indicates logical directions for future change. The authors contend that traditional support of public school facility financing and attendant debt service has outlived its usefulness and should be altered in accordance with modern economic trends and legal theory. Following an overview of the problem, the authors examine governmental financing on local, State, and federal levels. Among the items discussed are bond issues, voter resistance, legal indebtedness limits, State Loan programs, State grants, and federal participation. Next, the authors look at cooperative financing by quasi-governmental building authorities at State and local levels. Following this discussion, the authors point up the efforts being made to achieve economies in school construction through reduction of the need for new facilities, the space required for a given facility, and the costs of construction or remodeling. Two tables in the appendix show the amount of funds available for grants and loans to local school districts for capital outlay and debt service in selected years for the 50 States. A bibliography is provided at the end of each chapter. (Author/DN)