This WestEd Perspectives piece examines the challenge of declining student enrollment in California public schools, a trend expected to continue over the next decade. Because state funding is directly tied to enrollment and attendance, these declines will lead to sustained revenue losses, unlike past recession-related drops that later recovered. At the same time, schools face higher costs because a growing proportion of students require additional support, and competition from alternative schooling options further complicates resource allocation. Federal budget austerity and the expiration of pandemic relief funds are also reducing available resources. This piece further emphasizes the importance of maintaining community trust to support school funding and recommends that school leaders improve forecasting, use scenario planning and cost analysis to inform spending decisions, and strengthen public communication in response to these ongoing challenges.