I haven't really gone into detail about this yet, but my school district is in a major financial pickle. We're just one of many school districts throughout the country that are in the same boat.
There are a lot of factors that go into this, including:
1. We are very isolated and if a family/parent loses a job they don't have a lot of other prospects. As a result of the current economy we've lost several families/students to bigger districts. A family with four kids just moved to Arkansas for the Dad's job last week. For each kid we lose the district loses thousands of dollars in funding from the state.
2. The county has lost millions in unpaid property taxes (because people can't afford to pay them) and a hefty chunk of that money would go to local schools.
3. Rising costs of... well, everything.
The district is talking about major cuts. We've already cut over $500,000 since last year and we need to cut $1 million next year and over a $1.2 million from the following year's budget.
The number one (and really only) spot in a school district's budget to make big cuts is in personnel. The superintendent sent out an email last Thursday saying that there was a motion before the board to cut 9 positions from next year and she outlined the district's policy of letting probationary teachers go first. This is perfectly normal, but unfortunately I fall under that category until the end of next school year.