One of twelve case studies growing out of the Educational Governance Project, this report contains a description and an analysis of the process through which Minnesota State government establishes policy for its public elementary and secondary schools. This process is affected by many factors, such as the availability of fiscal and human resources, demands arising from population changes, and the power of individuals and groups who represent private interests. Lack of time and money prevented an indepth study of all these factors and necessitated the focus on the role and impact of the various actors -- official and unofficial -- who became involved at the State level in setting public school policy. Some data resulted from an investigation of the way in which three recent education decisions were determined. Additional data were derived from studies of the perceptions held by a cross section of participants of the influence relationships characterizing the operation of the State education policy system. (Author/JF)