This study examines the results of decremental state budgeting on Minnesota elementary and secondary education during the 1981-83 biennium, a period of sudden fiscal crisis. Using the fiscal reports of various departments of Minnesota State government and interviews with state officials, the author narrates the sequence of revenue shortfalls and official responses, focusing on changes in allocation for schools at various times in the rebudgeting process. The background of the crisis is outlined in explanations of the stages of Minnesota's biennium budget cycle and of the political and fiscal forces surrounding the worsening condition of the state budget. For the purpose of comparing the projected school allocations, the Minnesota school finance system is described and a revenue plan model is constructed. This model is then applied at five stages of the budget crisis as school allocations changed, showing the areas chosen for cuts in state aid. Conclusions are drawn about weaknesses in the Minnesota finance system and their impact on school finance in the 1981-83 biennium. (JW)