The school spending model described in this report involves institutions and information based on the following reasoning. Where education spending must be approved by referenda, the school board seeks to obtain as large a budget as possible. Voters have to approve the budget proposal or accept the "reversion" level of spending--that statutorily mandated level of spending that prevails should a referendum fail. Since the budget-setters can use a low reversion level to threaten the voters into accepting higher expenditures, the institutional structure matters in the model. Knowledge of a lump-sum state grant will typically lower voters' desired levels of spending from local sources. Also, larger grants lead to larger reversions and diminish the threat available to the budget-setters. The model, presented in a mathematical formula, was applied to a sample of 111 relatively large Oregon school districts for the 1971-72 school year. The data strongly suggest substantial underperception of state aid. This voter ignorance of state aid had the following effects: total spending was increased by some 30 percent in all districts; and, in the 40 percent of the districts that had reversions below the school closing threshold, the reversion effects and perception effects interacted to boost spending by an additional 15 percent. Three tables and nine references are included. (MLF)