This speech reviews the literature on school closings in the context of declining economic support. Declining school enrollment, coupled with declining funds (fiscal retrenchment), makes school district reform necessary. A school district in Seattle, Washington took approximately a decade to resolve these problems. A district planning commission's recommendations finally made school closing successful and politically acceptable. This speech commends Boyd and Wheaton's "rational model" for dealing with these problems. It has four ingredients: (1) design the best solution which is politically viable; (2) secure community and staff understanding and consent; (3) maintain legitimacy of the educational leaders' policymaking process; and (4) move rapidly toward closure on retrenchment decisions. It also commends Berger's two-by-two matrices to help school personnel deal more systematically and successfully with managing school decline. The "Substantive Issue Matrix" contains equity and efficiency as consequences on one axis, and revenue generating and cost cutting as types of policies on the other axis. The "Process Issues Matrix" contains equity and efficiency as consequences on one axis and technical and political as policies on the second axis. Berger performed a post facto analysis on case studies from 70 school districts involved in retrenchment. His findings show that decisions and actions which optimize efficiency produce more positive long-term organizational consequences. Behm suggests that dealing positively with retrenchment requires leaders to take aggressive action. Boyd and Wheaton found that different processes should be used with "white collar" and "blue collar" communities. (KS)