This paper presents an overview of legislative developments and policy debates that occurred in Maryland during 1994-95 and their effects on school finance. These developments include: (1) the election, by a narrow margin, of a new Democratic governor who promised to restore state cuts in educational expenditures; (2) the increase of minority-party power in the state legislature; (3) the enhanced role of the Maryland State Teachers Association in state-level decision making; (4) the debate over who should control education--professional lay boards or elected political leaders; (5) the effect of stricter Internal Revenue Service (IRS) standards for independent-contract employees; and (6) controversy generated by the American Civil Liberties Union's (ACLU's) charge that the state fails to adequately fund Baltimore City Public Schools. Maryland schools have received funds at the rate of projected increases. A conclusion is that although state-aid formulas need to be revised, education funding is unlikely to change until the size of the state income-tax reduction and future revenues are known. (LMI)