At the request of the North Carolina School Boards Association, a nationally recognized expert on school and school district consolidation evaluated the 1986 North Carolina Department of Public Instruction (DPI) plan for school district consolidation from the perspective of economic, educational, and social/political considerations, including the issues of fiscal and racial equality. Findings indicated (1) that the DPI failed to demonstrate that mergers will advocate any compelling state interest; (2) there is no solid foundation for the belief that elimination of school districts will improve education, enhance cost-effectiveness, or promote greater equality; and , (3) except for extraordinary circumstances, district reorganization should remain a voluntary decision of local voters and school boards. The report makes the following major points/suggestions: (1) complex, far-reaching merger decisions should be made on a case-by-case basis; (2) since good schools/school districts come in all shapes and sizes, educational policies relying on rigid size/organization criteria are likely to have counterproductive effects; (3) since mandatory mergers will not advance any compelling state interest, "back door" consolidation approaches should be discontinued; (4) alternatives to consolidation can expand educational opportunities and enhance cost-effectiveness; and (5) issues like mergers usually are a diversion from the greater tasks of finding new ways to positively influence children's lives and increase teacher effectiveness. (NEC)