Sixty New Mexico school district superintendents responded to a survey regarding reduction of personnel and educational programs, impacts of decline on quality of education, and desirability of alteration of the funding formula to recognize impacts of declining enrollments. Three groups of districts emerged: those where reduction had occurred (32); those expecting reduction in the next several years (15); and those not expecting reduction (13). Not only were small districts affected by decline, but some larger ones as well. While teacher reduction was most likely at the secondary level, reduction in instructional aides was more likely at the elementary level. Sixteen superintendents felt that reduction should be addressed in the funding formula, 13 said it should not, and 27 favored continued study of the situation (4 did not respond to the question). Superintendents did not target any particular program for real or anticipated reduction, rather they chose several areas, particularly fine arts, enrichment courses, extracurricular activities, and interscholastic sports. Since some superintendents felt their districts' quality of education had improved in the past few years, program modification and reduction forced by decline can bring opportunities to school districts. (BRR)