Over the past twenty-five years, California has revolutionized its system of school finance. In the 1960s, school districts set their own property tax rates, and the state supplemented the districts' tax revenue with foundation aid. Today, the state determines each district's tax revenue. This revolution in school finance resulted from two events: the ruling of the California Supreme Court in Serrano v. Priest in 1971 and the passage of Proposition 13 in 1978. The authors examine how the transformation of school finance has affected the distribution of revenues, average spending per pupil, class sizes, teachers' salaries, and student achievement. They also investigate the extent to which state finance has led parents to either enroll their children in private schools or make voluntary contributions to their children's public schools. They conclude with a discussion of how successful the reform efforts have been in equalizing educational quality across districts and whether state financing of public schools has been good for California.