Capital outlay for school facilities is receiving interest as focus is turned toward all facets of education, including the condition of the physical learning environment. Recent court decisions have brought about some equity in school financing, but the potential exists for future lawsuits for equity in educational facilities. There is a concern in the research literature for construction, maintenance, renovation, and similar capital outlay issues. Several studies conducted in Kansas suggest that state school districts are confronted with facility finance problems. The age and condition of facilities suggest continued and increasing maintenance and replacement costs. Kansas districts will continue to face obvious facility needs and inequalities. Conclusions of the study include: (1) methods of funding capital outlay need to be changed; (2) neither rural nor urban school districts have a distinct advantage in facility funding; (3) there exists an inaccurate assumption that rural areas are wealthier than the urban areas; (4) rural and urban districts have different circumstances but similar problems; (5) the size of the capital outlay problem in Kansas is growing due to the age of the facilities and the deferral of maintenance and improvement; (6) tax rates, local economic health, and adequacy of the tax base determine the ability to bond for construction; (7) ability to finance facilities varies from district to district; (8) a majority of Kansas districts are unable to fund either the mean ability level or the mean expenditure level; and (9) the impact of facilities on educational programs must be a central concern in the assessment of equity. Suggestions for funding and state aid mechanisms are given. Contains 30 references, and 10 tables outlining research data. (ALL)