The responses of state colleges and universities to substantial reductions in their appropriations are examined in a one-year study that encompasses experience with fiscal stringency in about a dozen states, primarily in five states. Some key concepts such as "retrenchment,""time," and the differences in statewide organizations for governing and coordinating higher education are defined and six major questions are addressed: What are the immediate responses to retrenchment? Who should participate in establishing procedures and selecting priorities and criteria for retrenchment? What impediments are there on the flexibility required to respond to fiscal stringency and how can these be overcome? What special academic and support criteria and procedures should be used for layoff of personnel? and What are the possible longer term implications of retrenchment? Also discussed, in the context of new styles of administration, are resource allocation, principles and guidelines, and the role of state budget agencies. Case studies reporting the experiences of Florida, Michigan, New Jersey, New York, and Wisconsin are appended. (JMD)