California school districts are being expected to "do more with less." They face critical and competing pressures to improve academic achievement while remaining fiscally solvent in a time of increasing budgetary pressures. This report examines the financial circumstances of California's school districts and the actions they have been taking to cope with these competing demands. It looks at the various forces that govern both the revenues they receive and the expenditures they make, and the added pressures they face due to the insolvency of California's state budget and the fact that the 2010-11 budget was the latest in the state's history. The report also discusses new federal and state initiatives designed to improve student outcomes as well as policy actions that may add to districts' workload. (Contains 5 figures and 10 endnotes.) [Liz Terry, Smita Patel, and Raquel Gonzales provided research support for this paper.]