To help school managers make more efficient use of educational resources, this handbook discusses and describes zero-base budgeting (ZBB). After a brief introductory chapter, the author explores the nature and characteristics of ZBB, gives a little of its historical background, notes its relationship to planning and to educational accountability, and lists ZBB's five basic steps: (1) identifying "decision units" (defined as any programs that consume resources), (2) analyzing "decision packages" (documents that describe a decision's objectives, activities, resources, and costs), (3) ranking decision packages, (4) allocating funds, and (5) preparing official budgets. Chapter 3 covers the development of decision packages, including the packages' relationship to decision units, their contents, and the making of alternative packages. Sample decision package forms are provided. Chapter 4 discusses ranking the decision packages, suggests methods and procedures for ranking, and presents sample ranking forms. The final chapter outlines the implementation of ZBB, development of an implementation manual, the role of implementation teams and district administrations, and the importance of policy decisions, budget formats, communication, and personnel development in implementing ZBB. (RW)