Most educational finance reform proposals call for increased budgets for public education. How this money will be spent is the subject of this report. Since teachers now absorb the major proportion of educational expenditures, the author analyzes the relationship between school district budgets and the three main components of expenditures on teachers: numbers of teachers (teacher-pupil ratios), salary schedules, and teacher quality (experience and education). The analysis was based on census, financial, and school district information and teacher salary schedules for 602 California school districts, census year 1970 and school year 1971-1972. Results indicate that (1) expenditures on teachers rise at a less than proportional rate to total expenditures; (2) salary schedules, especially starting salaries, are relatively insensitive to total expenditures; (3) the distribution of teachers by experience and education varies with total expenditures; and (4) teacher-pupil ratios are especially sensitive to total expenditures. 42 pp. Bibliog.