Fueled by declining revenue from the housing crisis, skyrocketing energy costs, and an economy in general disarray, the public is pressuring school administrators to make broader and deeper cuts in their operating budgets. As the baby boomers retire, put their houses on the market, and downsize, one will see more downward price pressure on home values. This decline in home values will affect the revenues that districts take into the system in the form of real estate taxes. Pension and health care costs are creating revenue pressure for school districts as well. Pension obligations are bankrupting states and increasing the districts' challenge to keep pension plans solvent. Health care obligations are also of increasing concern. In this article, the author discusses strategies and solutions in tackling pension and health care costs. He stresses that it is time for teachers unions and districts to support responsible and sustainable pension and benefit packages for teachers and public-sector employees.