Fifteen papers commissioned by the U.S. Department of Education's School Finance Project are contained in this volume. The papers examine the changing dimensions of the federal-state partnership in education. The volume is organized into four sections. The first section is devoted to state educational policy concerns, including various state approaches to improving educational quality, school finance reform, and the states' relationship to special needs students. In the second section, the focus is on lessons states can learn from federal education programs, including material on federal strategies used prior to 1981 to deliver services to target groups such as the disadvantaged or handicapped, federal strategies for educational improvement, and what past experience with different types of federal programs can teach about intervention effectiveness. Consolidated and block grants as an alternative framework for federal-state programs and the probable responses of state education agencies to such programs are the subjects of the third section. The final section offers recommendations for restructuring the federal-state partnership in education, including the suggestion that the federal government adopt differential treatment for states that are merely adapting federal programs and states that are not complying. The suggestion is made that one form of differentiating (waivers) would be expensive and cumbersome. Other recommendations concern school-based strategies for school improvement and federal and state policies that reward improvement of learning. (JM)