In light of a slow economic recovery from the Great Recession, state and local governments are faced with the challenge of providing services to citizens amidst ongoing budgetary woes. For instance, although the most recent Indiana revenue collections for the month of August were above revised projections to help start fiscal year 2011 (which commenced July 1, 2010), the state's revenues were far below amounts anticipated for the fiscal year 2010 budget. In total, revenue for fiscal year 2010 was $957 million less than budgeted and state revenues have dropped 12.3 percent over the past two years (Berry, 2010). States across the nation face estimated aggregate budget gaps of over $83 billion for the 2011 fiscal year (National Conference of State Legislators, 2010). In the current economic climate it is increasingly important for all levels of government to maximize efficiency and minimize costs wherever possible to prevent further service reductions or the necessity for a tax increase. School and school district consolidation has been debated as a potential source of cost savings for local and state governments. School and school district consolidation is the process of combining schools and/or school district administrative functions for the purpose of improving operating efficiency and/or expanding educational opportunities. The potential for cost savings through consolidation must be examined with respect to the impact such consolidation may have on student achievement. Recently, states have taken varying approaches to promoting consolidation at the school and district level. This policy brief provides a concise summary of the research on school and school district consolidation and a synopsis of the consolidation legislation passed in other states, with an emphasis on Maine, before analyzing legislative proposals and research specific to Indiana. A summary of school district consolidation feasibility studies conducted in Indiana is also included. (Contains 7 tables, 5 figures and 7 online resources.)