An overview of 1977 state reforms is presented here as well as current trends in litigation strategies, status of policy research on emerging issues, and prospects for 1978. The first section describes important finance reforms and modifications as well as recent court decisions in school finance and the changes that are emerging in school finance litigation strategies. The key feature of 1977 school finance reforms is a revised general aid equalization formula that distributes more state aid to school districts low in property wealth. Other reforms concern special education, compensatory education, bilingual-bicultural education, aid to central cities, aid to poor rural areas, income factors in state aid formulas, cost-of-education adjustments, and tax and expenditure controls. Section 2 of the booklet provides an overview of public policy issues related to school finance reform and discusses the results of research conducted on those issues. These issues include school finance equalization, the politics of education, changing societal demographics, collective bargaining, taxpayer revolt, and federal role in school finance. (Author/JM)