The long economic boom enabled school districts nationwide to fund expensive reforms and hefty pay raises. Now, however, they are finding it nearly impossible to cut costs and balance their budgets. The specific path to financial distress is unique in each case. Any number of factors, from excessively generous concessions at the bargaining table to a fiscal crisis at the state level, can throw a district into financial turmoil. The common way of dealing with these crises is to focus on the immediate causes of financial distress and to treat them as a straightforward management problem. However, such crises are more properly understood as the result of underlying political and legal realities that prevent districts from managing their finances properly. In this article, the author discusses the downsides of incrementalism as well as the perils of instructional leadership and the usefulness of insolvency. (Contains 4 figures.)