Information is presented on 1980-81 tax performance and educational spending in Southern Regional Education Board (SREB) states, the relationship of state and local taxes to personal income in all the states, and utilization of tax ability and major tax bases. Additionally, factors producing serious state and local budgetary problems are identified, including the low rate of economic growth, tax policy, and the link between state-local income tax regulations and federal income tax rules. For the SREB states, information is presented on: per pupil expenditure for elementary and secondary education; per capita appropriations for higher education; and state appropriations for higher educational operations as a percent of state taxes ranked against state and local support of elementary and secondary education. States that rank among the highest in their tax contribution to higher education are lowest in support of elementary and secondary schools. In 1980, state and local taxes collected in the United States per $1,000 of personal income amounted to $110.75. Major tax sources (general sales, selective sales, property, individual income, and corporation income) are compared to the 14 SREB States and for the other regions aggregately. For 1980-81, tax and spending reduction were somewhat more common than tax increases. Among the SREB states, inflation-adjusted declines in higher education funding were especially serious in Arkansas, Alabama, Tennessee, and South Carolina. The declines occur at a time of reduced federal support. On a per capita basis, seven SREB states are above the average in support of higher education: Alabama, Louisiana, Mississippi, North Carolina, South Carolina, Texas, and Virginia. Maryland is the only SREB state that exceeds the national average in support of elementary and secondary education. (SW)