In 1995, the Texas Supreme Court ruled that the current system of school provided substantial equal access to equal funds, except in the case of school facilities. This report explores the needs of Texas public school districts for facilities and the options that districts have in meeting those needs, followed by recommendations to improve the current system. The first chapter reviews the literature on the impact of facilities on student learning and development. Class size and school size, as well as building condition are found to influence student outcomes. The second chapter investigates the three primary factors that drive school facility needs: enrollment growth, the condition of buildings, and programmatic needs. In chapter three, current options for financing school facilities are examined. Chapter four analyzes the implication of the current system of facilities financing, emphasizing issues related to the equity and adequacy of current resources, especially in property-poor school districts. The final chapter provides suggested strategies for change in school facilities finance policy, evaluating both advantages and disadvantages of each option.