Inequality in school facilities is emerging as a pivotal factor in court decisions that have ruled state school-funding systems unconstitutional. This report examines cases in three states--Arizona, Ohio, and Texas--where courts considered school facilities paramount in ruling the funding system unconstitutional. Arizona's school funding system was the first to be declared unconstitutional based solely on the condition of school facilities. The Ohio court decision detailed a constitutionally acceptable system of school funding. The lack of a separate facilities component in Texas could render the entire school finance system unconstitutional. Because states should not expect significant assistance from the federal government for school facilities, it is recommended that states conduct statewide assessments of the condition of existing school facilities and needed new school construction; develop an equitable funding formula; and mandate the allocation of school aid for routine maintenance. One figure is included. Contains 13 notes. (LMI)