The Educational Priorities Panel undertook a study to find out how funds are distributed among community school districts in New York (New York) and how resources are distributed to individual schools within the system. District decision making was also studied. In Part I, interviews were conducted in 10 representative school districts to learn how local participants in the budget process viewed their roles and how they used newly published spending plans. Superintendents, business managers, community school-board members, school staff, and parents were interviewed about the budget process and allocation choices. Budget decision-making processes throughout the school system are highly centralized. The central board enjoys a much wider range of policy options than has been awarded to the individual districts. Even within the community school districts, fiscal decision making is highly centralized. Community school boards and parents have little influence on spending decisions. In addition, the central-budget process is often out of step timewise with the local schedule for making allocation decisions. Published spending plans are difficult to understand and consequently are not used effectively. Recommendations are made for bottom-up, rather than top-down, decision making about resources. (SLD)