This document is the second in a series of reports that measures progress to-date in making New Jersey's school finance system fairer to students and taxpayers alike. It examines change in the distribution of revenues and expenditures between 1975-76 and 1978-79, the equity of these distributions, how budget caps influenced these shifts, and the relationship between expenditures and the distribution of educational resources. These issues are examined in light of the negligible effect of the Public School Education Act of 1975. This act, the report states, was designed to meet the New Jersey Supreme Court's objections in Robinson v. Cahill that heavy reliance on local property taxes to pay for education was not producing the constitutionally mandated, thorough and efficient education for students. Several tables are included throughout the report. The appendices offer an explanation of methodology used and how the state aid formula operates. (Author/LD)