A school district in Rosemont, Minnesota, cut 2.4 million dollars from its general fund budget in 1982-83, a cut of almost 10 percent. Instead of splitting the community, the district emerged from the process stronger than before. This was accomplished through a 4-month participatory management process involving staff, citizens, parents, and students. First, recommendations for budget adjustments were solicited from the staff, then a task force on budget adjustment was established to categorize and rank the staff recommendations. Next the task force conducted a cost analysis for suggestions and put it into a format to disseminate to the community. After two board of education workshops that studied the budget issues, the recommendations were taken to parents and citizens. Staff members were trained to help facilitate public meetings, attended by 2,000 people, at the 10 elementary schools. "Quality Circles" were conducted with students to give them an opportunity to make suggestions. When the superintendent announced the budget reductions, the staff greeted her with a standing ovation and the board of education approved them unanimously. The public and the students had been treated as if they could understand complicated financing issues and rose to the challenge. Through a fully cooperative process, consensus was achieved. (MD)