Kentucky has a long history of educational problems and of reform efforts that failed because of state neglect. These problems, which deeply affect rural economic development and are closely tied to patterns of unequal development, have become more troublesome as world markets have changed. The roots of these problems are planted in the state's sociocultural history of rural values and attitudes, the attendant political economy based on low-skill jobs, and rural and urban class structures that reinforce social inequality. Middle-class farmers and capitalists involved in extractive industries and textiles traditionally have seen little value in worker education and have resisted tax increases for education. This paper examines the 1990 Kentucky legislative session, passage of the Kentucky Educational Reform Act of 1990, and subsequent political developments related to educational finance issues. The education reform package, which was mandated by the state Supreme Court, passed by a solid majority but still faces considerable opposition from a predominantly rural class-based group. However, this powerful group may be losing ground as Kentucky state government becomes more responsive to capital from Japanese manufacturers now locating in the state. This paper provides 61 references, the major provisions of the reform package, and tables and maps describing Kentucky's educational and socioeconomic characteristics, per-pupil revenues, and legislators' votes on the reform bill by party and occupation. (Author/SV)