The system of school finance equity in Texas is described as it existed before the court case Edgewood Independent School District (ISD) v. Kirby, and the overhaul mandated by legal rulings in the evolving Edgewood case is reviewed. In Texas, as elsewhere, the system of school finance has historically been based on the local property taxes collected at the district level. In Texas, these funds have been supplemented by state Foundation School Program funds. In fact, wealthy districts have been able to raise more money and to avoid caps on their spending. In 1987, the District Court held in "Edgewood" that the Texas system was unconstitutional in that it denied children in poor districts the equal protection of the laws and failed to provide an efficient educational system. This decision was overruled in the Texas Appeals Court, a decision subsequently reversed by the Texas Supreme Court, which reaffirmed that the state system was not constitutional. Since 1990 both the legislature and the plaintiffs have proposed new funding plans. The discussion surrounding these proposals is reviewed, with attention to issues of equity and school consolidation. The state school finance law is being rewritten in 1993, with current economic concerns added to those already identified for educational equity. (SLD)