This report focuses on the economic and financial aspects of education in the Catholic schools and presents information about the impact that the closing of Catholic schools would have on the finances of the Philadelphia Public School System. Major findings show that (1) Catholic schools are currently operating at a deficit, (2) deficits will continue and will increase in the next several years, (3) real (price adjusted) revenues are declining, (4) costs are increasing, and (5) Catholic school enrollments are declining. To remedy some of the problems, the authors suggest that these schools charge tuition and improve their management information systems. Numerous tables illustrate the text. Appendixes contain (1) a summary of other experience -- beyond Philadelphia, (2) a summary of legislation affecting education, and (3) a summary of local cooperative programs between public and nonpublic schools. (Author/JF)