All school districts are affected by the stagnant economy, the growing needs of the public sector, the increased burden of transfer payments, and the limited growth of public revenues. Retrenchment is common to all school districts, but it may be more severe in affluent districts. By 1969-70, suburban school systems were the clear-cut expenditure leaders, with many spending at twice the median expenditure level for their state. However, events of the early 1970s appear to be placing these districts on the same time line that earlier saw the rise and demise of large cities as the expenditure leaders. In part, this is due to post-Serrano reforms that restrict the expenditures of the most affluent school districts. In addition to ceilings on local tax rates, the federal fund slowdown, the higher charges of intermediate districts, and changes in state aid formulas, special economic circumstances affecting affluent districts threaten their leadership role. Affluent districts typically have high-priced residences; coincidence of a general economic downturn with a local decline in housing values can result in a rapid drop in the expenditure level of affluent school systems. Whether this loss affects only the affluent, or the entire school-age population, only time will tell. (Author/JG)