Fiscal equity in public education has been a substantive issue with a long history in school finance literature. However, the growing demands of capital outlay financing are given little or no attention in typical equity funding schemes. Currently, school districts throughout the nation are faced with the need to finance the construction, renovation, or repair of public school facilities. This study extends equity theory and evaluative methods from their traditional concern with current educational expenditures to the inclusion of capital outlay expenditures and makes comparisons between rural and nonrural school systems. The study includes analysis, with procedures that illuminate the equity condition from a variety of perspectives, of the impact of capital outlay funding divided into state and local allocations on the equity of current educational expenditures. Also, the comparisons of capital outlay expenditures and current educational expenditures are made between rural and nonrural schools. The study was guided by the following research questions: (1) How do current educational expenditures compare with capital outlay expenditures for the years 1995-2003 in Oklahoma?; and (2) Are current educational expenditures and capital outlay expenditures equitable between rural and nonrural schools in Oklahoma? (Contains 7 tables and 26 footnotes.)