In order to analyze the effectiveness of school districts in Kentucky, a study looked at basic skill test scores in reading and language at two grade levels, 3rd and 10th. In order to take into account student differences between school districts, the percentage of students in the "below average" range on the Short Form Test of Academic Abilities (SFTAA) Verbal Ability Tests for grades 3 and 10 were subtracted from the percentage in the below average category on the basic skills reading and language tests. Analysis indicated that Kentucky school districts are fairly effective. In an attempt to determine the sources of differences that did occur, a variety of administrative, teacher, and finance variables were examined in multiple regression analyses. Although student ability was the most important factor, other factors such as per pupil expenditure, administrative costs, and financial support also showed some influence. Increased expenditure seemed to lead to negative results, and other patterns were unclear. Perhaps more sophisticated measures or better sampling techniques will provide a better explanation of school effectiveness in the future. (JL)