Since 2007-08, state support for K-12 education has dropped notably, though this reduction has been partly offset by one-time federal aid and state K-12 payment deferrals. Per-pupil programmatic funding was down 3.7 percent in 2009-10 and 5 percent in 2010-11. To help school districts manage this reduction, the state temporarily removed the strings associated with roughly 40 categorical programs and eliminated various other requirements. We surveyed school districts to gather information regarding how they were being affected by recent federal and state actions. Most importantly, the survey responses show that many districts: (1) have reserved some federal Ed Jobs for 2011–12; (2) would find an additional deferral in 2011–12 more difficult to accommodate; (3) have benefited notably from existing flexibility provisions and desire additional flexibility; and (4) already have increased class sizes notably, instituted furlough days, laid off some teachers, and shortened the school year. Given these survey findings, we identify several ways the Legislature could provide school districts with more flexibility in the short term. We also provide the Legislature with a relatively simple approach for making more lasting improvements to California’s K–12 finance system.