KEOSAUQUA, IOWA -- On Thursday Iowa Governor Chet Culver announced he's slashing the state budget by 10 percent.

Culver says the cut is necessary to make up for a big drop in tax revenue in the state. But the governor’s budget cut means that Heartland districts like the Van Buren Community Schools in Keosauqua, Iowa, will take a hit.

Superintendent Dr. Karen Stinson found out Friday that her district will lose over $350,000.

“And we're a small school district so that's going to have a major impact on what's going to happen to us. And they've given us three options. We can either cut expenses, borrow money, or use our cash reserves so we'll probably have to do a little of all three to be able to survive,” she said.

Stinson says it will be difficult to make cuts because the district is already operating on a very tight budget.

“We already have contracts signed, we already have people on staff so we can't cut expenses there. So we've had to look at any other ways we can try and economize,” she said.

She tells KTVO district officials will have to do whatever they can to avoid any additional expenses, which could involve cutting field trips and possibly a hiring freeze.

“We don't have much of a cash reserve fund. We have some and we'll be okay up until June, but in July and August we get no state funds coming in. And that's when we still need to be able to make payroll for July and August,” said Stinson.

School officials say the district faces an additional challenge because of high transportation costs. Ninety-six percent of Van Buren Community Schools' students ride the bus to school.