This paper discusses the implications for State educational finance of the recent Serrano vs Priest decision and tries to clarify the exact meaning of the Serrano case. It notes that the use of property taxes for financing schools is not barred by the decision. Rather, the case expresses the principle of neutrality -- the level of spending for a child's education may not be a function of wealth. According to the report, many State legislatures will probably turn to full State funding of education to satisfy this principle of neutrality. (JF)