The "voucher system" refers to one type of system the government may employ to channel tax funds into public services. Its distinguisihing feature is that it distributes funds directly to individual citizens instead of public institutions, i.e., the individual is given a voucher to purchase the services he chooses. This report focuses on the "voucher system" as it may be used to finance education in New York State. As conceptualized in this report, vouchers would be given to students and institutions would raise their tuition to approximate the full cost of instruction. This report briefly reviews some of the suggestions made since the early sixties relating to a "voucher system"; it discusses the Hansen and Weisbrod plan as a method to finance undergraduate education in Wisconsin, and the application of this plan to New York State. The last section of the report discusses the advantages and disadvantages of a "voucher system." A brief review of federal and state proposals, a list of individuals consulted, and a bibliography comprise the appendices. (AF)