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We explore two complementary mechanisms that are designed to work together to reduce spatial inequality—redrawing municipal borders and the redistribution of tax resources. This study's methodology is based on the empirical analysis of 376 decisions of boundary commissions and permanent geographic commissions that resulted in land transfers and redistributed tax resources in Israel. Our findings indicate that the impact on spatial inequality is mixed. Over time, the amount of land transferred to low socio-economic municipalities has increased, provided that these municipalities are located in the center of the country, or have a Jewish ethnic majority, are politically affiliated with the Minister of the Interior and the ultra-Orthodox right, are financially sound, and have a large population and a large area. In contrast, the redistribution of tax resources provides revenue increases for low socio-economic municipalities that are in the periphery, largely populated by Arabs, are unaffiliated with powerful politicians, are financially weak and small in size and population. [ABSTRACT FROM AUTHOR]