This paper discusses the merits of cost differentials and weighted-pupil formulas as vehicles for allocating State school support funds to local school districts. The research conducted by the National Educational Finance Project to identify educational program expenditures and to develop cost differentials for each educational program in a national sample of "best practice" school districts is described. In addition, the author briefly examines a number of similar projects conducted in Florida, Indiana, Texas, and Massachusetts. Tables tha summarize the cost differential indexes developed in each project are included. (JG)