This study was conducted to see how schools allocate resources during periods of declining revenue. It assumed that the places where staff reductions are made may indicate where districts feel they have "extra" resources. The study was conducted between 1969 and 1983 in Missouri and also includes supporting data from British Columbia. The study examined six hypotheses. It found that reductions in budgets do cause the reallocation process to begin. This includes teacher layoffs first and administrative support personnel layoffs next. Large reductions in budgets alter administrative growth components. Withdrawal of federal support appears to lead to reductions in administrative staffing. The authors point to two interpretations: first, that there are areas of school budgets considered "frills"; and second, that educators have not documented the benefits from increased use of support personnel, and that, as fiscal pressures rise, school boards choose to reduce these areas. (MD)