The article describes the correlation between financing system of education in Latvia and types of educational institutions and its’ founders, reflects and analyses historical development of financing system of education, as well as offers view on future development of system of teachers’ remuneration in Latvia and financing of maintenance expenditures of vocational educational institutions. It is concluded, that since the year 2000 the most significant change of principles of financing system of education occurred on the 1 September of the year 2009, when the new financing model of teachers’ remuneration “Money follows pupil” was enforced. Despite of dramatic cut of state budget financing and consequences of the administratively-territorial reform, new financing model was implemented successfully. It is concluded as well, that to continue to improve the financing system of education in Latvia it is necessary to made accurate assessment of expenditures on providing of educational programmes, to evaluate needs of pupils and teachers and to be realistic in estimating of state budget resources. To improve the effectiveness of use of state budget financing it is proposed to introduce financing model of teachers’ remuneration “Money follows pupil” step by step in all types of education in Latvia. At the same time it is essentially to remember that the results of optimization of state budget expenditures must not endanger the citizens' right to education. The article proposes, that when elaborating plan of development of financing system under the conditions of restricted state budget, it is necessary to draw attention to those categories of pupils and teachers that are in unequal circumstances comparing to other members of educational system.