The Educational Priorities Panel examined the allocation of tax levy funds to New York City academic and vocational high schools. The study attempted a statistical analysis of the actual distribution and utilization of funds for the fall terms 1975 through 1978. It also aimed to identify current budgeting and management practices that interfere with the delivery of quality education. A third goal of the study was to make recommendations that would effectively increase the worth of monies available by raising productivity and flexibility. Data were taken from board of education documents and interviews with principals, superintendents, and central office administrators. The study was based on the premise that the principal should have more flexibility and more accountability in administering the school and distributing resources. Following the discussion of the allocation of funds to high schools, six areas needing reform or improvement are discussed: differentiated staffing, management practices at central divisions of the board of education, contract provisions, disincentives in the formula for the improvement of attendance, flexibility in the expenditure of funds, and the equitable distribution of funds. Finally, there is a discussion of a proposed per capita allocation formula. (Author/JM)