Background and Context: U.S. schools rely heavily on property tax revenue. Local funding represents more than 45 percent of district-level revenues in the United States, and 60 percent of local funding comes from property taxes (Evans et al., 2019). This funding structure exacerbates educational inequalities between property-rich and property-poor neighborhoods. Districts with higher housing values generate larger revenues to contribute to their community's school system, while those with lower housing values must tax their citizens at higher rates to raise a comparable amount of funding. Since the 1970s, court cases and state legislation have attempted to make school funding systems more equitable between districts. These reforms have resulted in meaningful student outcomes, including increased educational achievement and improved longer-run economic success (e.g., Lafortune et al. 2018; Candelaria and Shores 2019; Jackson et al. 2016). This study examines the effect of the 2018 McCleary Reform which increased the statewide property tax while capping the amount of funds that districts could raise through local property tax. We use Tiebout's theory of sorting (1956) to examine the extent to which homeowners responded to the McCleary reform. Tiebout (1956) contends that households sort themselves into neighborhoods according to their willingness to pay taxes for government goods and services. This theory suggests that local school district spending is an efficient response to citizens' preferences. Thus, school finance reforms (SFRs) that shift or limit the distribution of local and state funds may affect not only school revenues, but also residential choices and housing markets. Purpose & Research Questions: We examine homeowners' preferences for equity-driven school funding in Washington state by estimating the impact of the McCleary reform on housing markets. We ground our work in the following research questions: 1. What is the impact of a statewide equity tax to fund basic education on housing markets? What are the characteristics of districts that experience higher tax liability as a result of this statewide tax? 2. What is the impact of shifting school funding from the local to the state level on housing markets? What are the characteristics of districts that experience more or less tax liability as a result of this policy? Setting and Policy Background: This paper focuses on the Washington state McCleary reform which fundamentally shifted how school revenues were collected and distributed to school districts. The reform created a "levy lid" that capped local revenues and increased the statewide school property tax levy. This so-called "levy swap" between local and state revenues ensured more equitable funding across districts by limiting local funding in favor of a redistributive state tax that provided an additional $350 to $410 per student in high-poverty districts compared to low-poverty districts. The McCleary reforms impacted homeowners' tax liabilities at the state and local levels. Starting in 2018, the state property tax for public schools increased by 80 cents to $2.70 per $1,000 of assessed valuation. Homeowners experienced a second tax-related change in 2019 when local property tax levies for schools were capped at either $1.50 per $1,000 of assessed value or $2,500 per student (whichever was lower). This cap resulted in a substantial decrease in revenue for some districts where local levies had been as high as $9.10 in 2017. Research Design and Methods: We use data from the Zillow Transaction and Assessor Dataset (ZTRAX) (2020), the National Center for Education Statistics School District Geographic Relationship Files, and the Washington State Legislature Office of Program Research (WSLOPR) to estimate the causal impact of the McCleary reform on median house sale prices by districts over time with a comparative interrupted time series (CITS) design and an event study framework. We estimate within-state differences by leveraging variation in districts with larger and smaller estimated changes to their tax liability as a result of the reform (different "dosages" of the reform). We capture this variation by creating three terciles that represent large, medium, and small changes to citizens' tax liabilities based on estimates produced by the WSLOPR prior to the reform taking place. Figure 1 displays the spread of these terciles across Washington state. We estimate reduced-form causal effects with the following CITS model: [SEE PDF FOR EQUATION AND PARAGRAPH DESCRIBING TERMS] Results and Discussion: Our preliminary results suggest that median sale prices in Tercile 3 (districts with the largest change in tax liabilities) decreased by 20% compared to Tercile 1 (districts with the smallest or negative changes in tax liabilities). We find no evidence of differences between Tercile 2 and Tercile 1. In other words, districts with the largest and smallest changes to property tax liabilities experienced substantial changes in housing markets, potentially pointing to a shift in homeowners' preferences. Further work will examine the effect of the reform on education revenues within districts. We also plan to provide more descriptive information about the terciles described above to understand the characteristics of districts that most and least benefited from the policy change. Contribution to Policy Research: Our study examines the within-state variability of the McCleary reform which substantially centralized school finance from the local level to the state level in Washington. Importantly, districts were differentially affected by the state, allowing us to examine heterogeneous effects on housing capitalization. Our findings will provide insight into citizens' preference for increased taxation and statewide redistribution efforts for school funding.