By Jacob E. Adams, Jr. and E. Michael Foster article analyzes a specific school finance policy issue in Kentucky regarding whether the state should pursue school district consolidation. The need for such an analysis derived from a 1993 policy debate in the Commonwealth in which then-Governor Brereton Jones proposed small-district consolidations as a fiscally responsible next-needed reform to reduce state educational costs while maintaining the integrity of programmatic and finance re-forms already underway. He contended that Kentucky operated too many small school districts and that the state could save money and gain efficiency by consolidating the smaller districts. 1 In the summer of 1993, in remarks before the Prichard Com-mittee for Academic Excellence, a respected and influential Ken-tucky citizens group monitoring school reform, the governor asked the committee to investigate the relationship between school district size and state educational costs and to report whether savings in state dollars were possible by reorganizing small districts. In a state context of educational reform2 and declining public revenues, 3 the Kentucky governor was asking whether the state could save money, or extend its existing commitment to public schools, by consolidating small school districts. Governor Jones was not the first in the Commonwealth to raise the issue of small-district consolidation. The issue had appeared