All School Finance Equalizations are Not Created Equal

School finance equalization has probably affected American schools more than any other reform of the last 30 years. Understanding it is a prerequisite for making optimal social investments in human capital. Yet, it is poorly understood. In this paper I explain why: it differs from conventional redistribution because it is based on property values, which are endogenous to schools' productivity, taste for education, and the school finance system itself. I characterize equalization schemes and show why some "level down" and others "level up." Schemes that strongly level down have unintended consequences: even poor districts can end up worse off. I also show how school finance equalization affects property prices, private school attendance, and student achievement.