In rural Oregon, the one-school, 240-student K-12 Perrydale school district faces the possibility of consolidation with another school district. Oregon's Ballot Measure 5, passed in 1991, reduced property taxes to equally low levels around the state, drying up much of the locally raised money that is the lifeblood of school districts. In addition to Measure 5, legislators passed school-reform legislation mandating provisions that are costly to rural school districts. Perrydale will see its revenue shrink by 24 percent in the 1993-94 school year, and even more in the 1994-95 school year. By the 1995-96 school year, Perrydale will be essentially bankrupt. However, under the direction of superintendent/principal Tim Adsit, the board of education has devised creative ways to increase revenue. The proposals range from welcoming boarding students from other districts to creating a parks-and-recreation district to take over such programs as sports and art. State voters rejected a measure pushed by parent groups to institute a 5 percent sales tax that would replace school funds lost in property taxes. Teachers in Perrydale are already feeling the declining revenues with outdated textbooks, fewer field trips, and smaller library budgets. Despite the hardships, the community is reluctant to give up the sense of family and the solid education offered at the small school. (KS)