This thesis examines the budget reductions of six high and six low poverty school districts in California and Texas during the Great Recession. While recent studies have supported the positive influence of spending on student outcomes, few have looked at what happens when financial shocks constrain budgets. The study blends the National Center for Education Statistics' Common Core of Data school finance survey with a document analysis of publicly available district budgets, media sources, school board budget presentations, and other district financial data to highlight the ways that school districts adjusted (or did not adjust) spending within traditional spending categories. There were four key findings from the analysis of district data. First, federal aid through the American Reinvestment and Recovery Act proved critical in addressing school district budget deficits, particularly in higher-poverty school districts. Second, the loosening of categorical aid in California was a crucial policy decision that helped school leaders address local budget issues. Third, higher poverty districts in this study became increasingly reliant on state revenue during the recession, which could harm those districts' ability to weather future recessions. Finally, inaccurate enrollment and property value projections led several school districts to overextend their budgets and drain their emergency reserves in the years leading up to the recession. These districts accumulated a large amount of debt, which hindered their ability to recover from the recession. The lessons and takeaways from this research are helpful for policymakers and school leaders for future financial shocks. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com.bibliotheek.ehb.be/en-US/products/dissertations/individuals.shtml.]