This paper represents a backdrop from which to consider the development of a planning and budgeting model for local education agencies. The first part of the presentation describes the demands and external pressures that affect resource allocation decisions in school districts. The ability of local school officials to link the cost consequences and implications of these policy and environmental pressures provides the rationale for designing the Local Planning and Budgeting Model (LPBM). The second part examines in detail the strengths, weaknesses, and performance of two well-known, previous budget reforms, Planning, Programming and Budgeting System (PPBS) and Zero-Based Budgeting (ZBB); and summarizes the lessons to be learned from these prior attempts to rationalize educational budgeting processes. The paper ends with a skeletal overview of the LPBM's conceptual framework and the implications from part II for the development of a strategy for implementing the LPBM in local school districts. A bibliography of 55 citations is appended. (Author)