Using school finance reform as an example, the author argues that states are willing and able to handle redistributive education issues. The paper's first section presents 1970-81 financial data comparing federal and state governments' total aid to elementary and secondary education and their aid to categorical programs for handicapped, compensatory, and bilingual education. Section 2 gives an overview of states' school finance reforms in the 1970s. The section first discusses finance reforms as a redistributive issue and then provides descriptions of reforms in California, Connecticut, and Missouri as well as data on types of reforms in the 28 states with school finance reforms. Finally, it summarizes empirical studies on the reforms' impacts on state school finance structures. In the third section the author identifies political elements involved in state-level school finance reforms. He examines the roles of state courts in finance reform in all states, of state political leaders (especially governors and legislators) in the 28 states with reforms, and of the loose national network formed in the 1970s around school finance reform. Appendix tables provide data on state aid to public schools in all states. (RW)