centralization of financing at the state level will inevitably lead to lower state spending on education, an inference drawn from the California experience, is not supported by the evidence from other states. Nonetheless, some trade-offs remain. Of most importance for harnessing education finance to the broader goals of education policy is the need for policy makers to pay close attention to ensuring that changes in financing mechanisms do not weaken the incentives for districts or schools to be vigilant about the productive efficiency of the system and that intergovernmental aid programs are carefully designed to promote the goal of reducing the nexus between family background and student achievement.