State and district policymakers have difficult decisions ahead in their efforts to balance budgets, maintain school services, and prioritize safety amid the COVID-19 recession. While California's finances are stronger today than after the Great Recession a decade ago, funding for the school system is still volatile, and K-12 schools could face significant cuts if the state's economy does not recover quickly. In this report, the authors aim to understand how the Great Recession impacted funding for California's K-12 system, how prepared districts are for potential funding cuts, and what policy choices could forge a more financially resilient system. Concerns over lower state funding and higher expenditures for distance learning and school reopening have brought renewed attention to school reserves. The authors examine how district-held reserve funds are distributed, how they have evolved over time, and how effectively they shielded districts from spending cuts during the Great Recession. Using data on district spending, revenues, reserves, and staffing, the authors detail the efficacy of district-held reserve funds, examine areas where cuts occurred in the recession, and determine the state of preparedness districts find themselves in today for managing revenue shortfalls in the future. To build a school finance system that is stable and equitable when fiscal downturns lead to budget cuts, California must develop a more robust state K-12 reserve, help districts accumulate larger reserve funds, and prioritize student equity when balancing budgets. [For the technical appendices, see ED611520.]