EWEN -- The Ewen-Trout Creek School District has a stellar academic record, recently receiving yet another national honor.  But this year, just 257 students are enrolled in the district, and the school's budget is in the red.  Even shining academics can't help a deficit to the tune of over one million dollars. 

High school economics lesson:  as expenses rise and revenue falls, massive cuts are the only option.

Five-hundred-seven students made up the student body when the new school building opened in 1998.  Just 12 years later, that number has been cut in half.  The school is small but remains mighty.  Last year, 30 students graduated; 27 went on to further their education, the other three joined the military.  US News and World Report just awarded Ewen-Trout Creek a Bronze Medal for academic excellence.

"We're doing a fantastic job with our kids.  Our challenge is to continue to do that.  As every school, as every household or every business, you do the best you can with what you have," said School Superintendent Jim Rayner.

Financially, they don't have a lot, and unless they get out of the red by 2012, the state can come in and make the necessary cuts.

"Just this morning, I signed 39 paychecks.  All those 39 paychecks would be in jeopardy if we lose our state aid, and the state has the power to do that," Rayner said.

In an effort to balance the budget, next year the district will employ just 14 full-time teachers, grades K-12.  And this year, they've cut back to a four-day school week.

"Financially, it's helped out as far as transportation, utilities in the building; we've been able to cut back hours on some of our support staff.  Educationally, it's still up in the air," said School Board President, John Pinkerton.

Art teacher, Gina Lindberg, has spent 27 years with the district, and even she is fearful for what the future holds:  "It is intimidating, although I come to work knowing that I have to do my best.  And if I can keep that out of my mind, I do fine."