This report provides an overview of a two-year study which analyzed reorganization/consolidation of small rural school districts, studied alternatives of inter-district resource sharing and new instructional technologies, and developed recommendations for changes in state laws/procedures. Researchers studied 11 small rural school districts in New York State, conducted interviews, studied community histories, analyzed statewide data, and reviewed research literature. Four conclusions emerged: (1) substantial problems existing in small rural school districts significantly disadvantage students, yet small districts provide important educational advantages to pupils and communities; (2) New York promotes district reorganization as the preferred solution to small rural school problems; (3) district reorganization has serious deficiencies and the state should not artificially encourage reorganization with financial incentives; and (4) neither resource sharing nor new technologies will solve problems related to school size. The report recommends 3 broad changes in state policy and 12 specific changes in state procedures/laws; the 3 broad changes are: (1) unbiased consideration of reorganization, (2) provision of additional organizational alternatives, and (3) state acceptance of financial responsibility for costs of expanding educational opportunities in small rural schools. Chapters discuss history of schooling in New York State, describe methodologies and towns/schools studied, examine politics/experiences of district reorganization, and explore resource sharing and innnovative technologies. (LFL)