Jonathan Kozol's Savage Inequalities (1991) is a searing indictment of the American system of public education. It paints a bleak picture of inner-city students struggling in overcrowded classrooms and dilapidated buildings. Kozol compares these children to suburban students at well-funded schools with large campuses, modern scientific equipment, and highly paid and well-trained faculty. While inner-city students, Kozol tells us, are often fortunate to graduate from high school, students from suburban schools are not asked if they will attend college, but where. These extremes, according to Kozol, are a result of the decentralized structure of education in the United States. As we show later in this chapter, the federal government provides only 7 percent of all of the funds devoted to K-12 education. The states and the nearly sixteen thousand school districts each provide roughly one-half of the rest. Local districts rely heavily on the property tax, a cornerstone of the U.S. education system. Kozol argues persuasively that funding local schools through local property taxes is inherently unfair because large disparities in tax bases across school districts lead inevitably to large differences in spending. In this chapter, we focus on many of the issues that are central to Kozol's work and present four main results. First, we show that while significant inequality remains, we have in fact made a great deal of progress in reducing some of the glaring disparities Kozol described in 1991. Depending on how we measure inequality in school spending, we find that inequality fell by 20 to 35 percent between 1972 and 1997. Second, we show that the states have played an essential role in reducing inequality in school spending. The states have assumed much greater responsibility for funding schools, and we show that state aid for schools effectively offsets some of the differences in local spending. Third, we argue that the courts have also played an important role in reducing inequality in school spending. A long string of court cases, beginning with Serrano v. Priest in 1971, have challenged the constitutionality of local funding of public schools. Opponents of local funding for primary and secondary schools have now brought cases in forty-three states. In this chapter, we argue that court-mandated education-finance reform often achieves its main objective. Court-ordered reform reduced inequality by raising district spending at the bottom of the distribution while leaving spending at the top unchanged. Fourth, we argue that while the gap in spending between rich and poor schools has shrunk, important differences in certain education inputs persist. We show, for example, that the qualifications of teachers, access to computers, and class size vary systematically across socioeconomic groups. In the second and third sections of the chapter, we look at the changing distribution of education spending. This focus on dollars makes sense in many ways. Dollars have been the measuring rod of education inequality during much of the long debate over education opportunity. As we show in the third section, for example, differences in spending across school districts were the key issue in Serrano and much of the subsequent litigation. This focus on dollars, however, is in some ways limited; the debate over inequality in education is also a debate over the distribution of the education resources those dollars can purchase. In the last section, we summarize what is known about the distribution of teacher characteristics, technology in the classroom, and the physical condition of schools.