This analysis looks at the effects of changes in school district size on the district budget. Specifically, budgetary changes reflecting the relative emphasis on instruction are analyzed. Proportional budget allocations are used to represent the relative investment of resources in functions or activities of school districts. Resource allocation patterns of Michigan school districts are examined and compared under both growth and decline in enrollment. The paper looks at three approaches to organizational change: organismic or structural theories, strategic decision-making theories, and routine decision-making theories. Patterns of change in budgetary allocations are used to assess the appropriateness of these approaches for describing the budgetary decisions in growing and declining school districts. Foremost is the question of whether decline is the mirror image of growth. Researchers discovered that both districts with declining enrollment and those with growing enrollment are decreasing proportional allocations to instruction and increasing nondiscretionary expenditures, especially for plant maintenance. The paper concludes that although the changes in school district budgetary allocation under either growth or decline are not completely consistent with any of the three approaches examined, they appear to be most consistent with theories of strategic decision-making. (Author/JM)