ECONOMIC ANALYSIS SHOULD BE APPLIED TO SCHOOL PLANNING TO PROVIDE A GENERAL FRAMEWORK WITHIN WHICH EDUCATIONAL OBJECTIVES CAN BE ACCOMPLISHED IN THE MOST REASONABLE MANNER. SYSTEMS ANALYSIS METHODS INTEGRATE THE DIFFERING VALUES OF EDUCATORS INTO COMMON OBJECTIVES. SUCCESSFUL USE OF PROGRAM BUDGETING DEPENDS ON (1) PLANNING, STRUCTURAL DESIGN, AND PROGRAM DEFINITION, (2) PROGRAMMING, SYSTEMS ANALYSIS, AND BUDGETING, (3) INFORMATION SUPPORT, EVALUATION, AND PROGRAM REVISION. EXAMPLES OF PROGRAM BUDGETING IN URBAN SCHOOL SYSTEMS AND IN NONEDUCATIONAL SETTINGS ARE DISCUSSED AND A LIST OF ADVANTAGES OF THE PROGRAM BUDGET IN EDUCATION IS PROVIDED. THIS ARTICLE IS PUBLISHED IN "URBAN EDUCATION," VOLUME 3, NUMBER 1, P.39-51, 1967. (AF)