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The impending devolution of program responsibility from the federal government to states and localities will probably increase their responsibility for designing and funding strategies for services to children and families. This paper presents state-by-state profiles of patterns of spending for education and other key health, welfare, and social services. The paper identifies factors that appear to drive spending costs: the need for education and other children's services in the state; the ability to pay (fiscal capacity); and the willingness to pay (fiscal effort). This context is then used to draw implications with regard to state spending for education and non-education children's services in the near future and beyond. The report looks at changes in state spending over time, as well as recent cross-sectional state data. In summary, the salience of indicators of need and ability to pay indicates that most states will be greatly challenged in financing these programs in the years ahead. Furthermore, the strong negative relationship between willingness to pay and noneducation children's spending--especially among the low-spending states--implies that finding the funds to support noneducation children's services in the absence of federal fiscal incentives and service mandates may prove especially difficult in these states. In general, a combination of increased needs, slower growth in fiscal capacity, and a reduced federal role in setting standards and providing financial support will make it extremely unlikely that the vast majority of states can sustain the per-child spending patterns of the previous two decades. Three figures and 16 tables are included. Information on the Finance Project and its available resources is included. (LMI)

This paper documents recent government policy changes and discusses the likelihood of their having significant, long-term impacts on policies to assist the educationally disadvantaged. It begins with an examination of traditional federal and state efforts to equalize educational opportunities through legal access guarantees, targeted categorical assistance programs, school-finance reforms, and the regulation of input and process standards. The paper then discusses why the traditional methods have been increasingly viewed as insufficient responses to securing equal educational opportunities, and examines the new approaches that have, in part, emanated from this dissatisfaction. The final section outlines some of the substantial challenges ahead for successfully implementing the new service strategies. A conclusion is that in response to weaknesses of traditional policy tools, a new set of state and federal policy reforms is beginning to emerge. Key components include more rigorous academic standards and curriculum frameworks; outcomes-driven accountability systems; more decentralized, coordinated, and citizen-responsive service-delivery arrangements; and funding strategies that focus on the assumed quality and adequacy of resource inputs in meeting designated student-achievement levels. These new initiatives differ from previous approaches in at least three ways: (1) their focus on performance outcomes; (2) the placing of policies for special-needs students within the context of improving the overall educational system; and (3) and a decreased reliance on state regulatory instruments. The future external policy environment will see a diminished federal role and tight funding constraints. The devolution of educational governance--in the form of charter schools, school choice, and block grants--may well thrive under these conditions. Information on the Finance Project and available resources is included. (Contains 28 references.) (LMI)