America's system for financing K-12 education is not neutral about innovation and the use of new technologies. Indeed, that system is stacked against them. To remedy this, our education-funding system needs to shift dramatically. Instead of today's model--which rigidly funds programs, staff positions, and administrative structures, instead of schools and students--we need an approach in which funding follows the student. At present, America's charter school finance structure provides the best prototype, but even it does not go far enough. An appropriate school-finance system must also be able to defend ineffective schools and provide space and incentives for online providers to bring their products to the marketplace. (Contains 1 table and 13 endnotes.)