This report provides data on inequality in school funding systems and the status of the legal challenges taking place. Disagreements about what is needed to resolve inequality are resolved through the political and legal process, professional judgment, and facts and objective data. This report provides facts and objective data. The first part describes large expenditure disparities among and within states and within local school districts. For example, after cost-of-living adjustments, New York spends 2.5 times the amount that Utah spends on schools. The second part shows how these expenditure disparities translate into disparities in educational programs. Such disparities are the basis of several court decisions relating to school funding. Data from the 1990 National Assessment of Educational Progress show the link between instructional materials and resources available to teachers and the mathematics proficiency of their students. The third part describes court decisions requiring greater equity in educational expenditures. Changes resulting from these decisions in Texas, Kentucky, and New Jersey are reviewed. The educational research community has not been able to determine the extent to which resource differences affect educational outcomes. Inequality in providing and financing public education represents a policy issue for all levels of government. Ten figures, one table, and a 33-item list of references are included. Four appendices contain four tables of expenditure and resource data. (SLD)