Before the 1970s, public school finance issues were mainly related to spending inequalities. However, since then, the focus has shifted towards financing education to improve its quality. This article suggests new research directions for school finance that address this policy interest, including topics related to state education reforms, traditional school finance issues, and education policy issues beyond current reforms.

Public school policy mak­ing is embedded in a complex societal matrix. It is not possi­ble to consider the future of U.S. schools without examining the size and distribution of future populations; the future state of the economy and its ef­fect on funds available for the schools; and the political context within which decisions will be made. The public school system is a "dependent variable" of larger social and economic forces.

Several state legislatures have acted on recommendations to improve U.S. public schools, resulting in a swift and broad education reform movement. States have expanded school improvement programs, increased high school graduation and college admission requirements, deepened course offerings, and strengthened the teaching profession. Indicators of progress include longer school attendance, tougher academic courses, better counseling, higher achievement test scores, and increased teacher pay. This swift and broad movement gives reason for optimism about its success.

This report analyzes the role of policy issue networks in early state policymaking stages and interstate diffusion of policy innovations. It defines agenda setting as active and serious consideration of a specific issue by state policymakers and investigates how state policymakers are stimulated to consider policy issues across the U.S. The authors further examine the nature of policy issue networks and their interaction with specific state political cultures, providing insights into the rapid interstate diffusion of new policy issues in the 1970s.