This report presents the findings and recommendations of a study of New Mexico's financing of education. A task force, created in 1995 by the state legislature, was charged with reviewing public school funding for the purpose of introducing legislation to reform the system. For the study, hired consultants reviewed historical documents, held interviews, conducted an analysis of formula and nonformula provisions, reviewed and recommended revision of program unit cost indices, and assessed fiscal and program accountability procedures. The principal finding was that the New Mexico public school funding formula was highly equitable. Since state law did not permit local school districts to levy additional taxes, spending disparities in the state were less than those that were apparent in other states. However, some perceived areas of unfairness were found and changes were proposed that included abolishing the size-adjustment factor for large school districts, among others. The task force endorsed the findings of the consultant and recommended some alterations, such as the creation of an at-risk factor in the funding formula to provide additional program units to school districts with students at risk of academic failure. An appendix lists the task-force members and contains a discussion draft of the proposed legislation for public school funding. (RJM)