School finance drives policy and practice in public education, yet most citizens and some practitioners know very little about how their schools are funded. The purpose of this article is to address the financial issues related to urban schools and the challenge of balancing expectations of higher levels of education with the values of equity, efficiency, and economic growth. Section 1 discusses the social context of school finance in the United States, including urban education issues. This section will discuss equity issues in the context of the history of school finance litigation in the United States. Section 1 will also show how the school funds are spent. Section 2 will discuss traditional funding structures and state funding policies. Section 3 will discuss decentralization and site-based budgeting, including the use of charters, vouchers, and contracts. The conclusion will explore how restructuring school budgeting can improve instruction and student performance.