HOUSTON --Unprecedented cuts could be on the way for the Houston Independent School District. As the state battles to reinvent it's budget, because there's not enough revenue and too much spending, most of the burden in Houston falls on school principals. Less money for the state means less money for their schools. Dr. James McSwain is Lamar High School's principal; he's now tasked with making major cuts. "We've been scrubbing every single line item of everything that we spend," he said. That's because in HISD's decentralized system, principals have the final say on what money gets spent and where once the administration splits up the dollars among schools. In this budget crisis where HISD may have to eliminate as much as $350 million, it can't all come from the top. "You could eliminate the whole central office and you couldn't get close to that," HISD Superintendent Terry Grier said. "It's more serious than I think people realize." That's why recently McSwain has had many sleepless nights. "There have been plenty of times in the last months where at 2 or 3 in the morning I wake up and that's what I'm thinking about; if we do this, who is that going to impact," McSwain said. Based on the state's preliminary numbers, McSwain says he must eliminate roughly $700,000 from Lamar's $12 million budget. That's roughly a $200 reduction per student, and it's not as simple as cutting sports programs or other activities. They, after all, are also required courses. "What are you going to do with those kids? You have a very high ratio of kids to teachers in those kinds of situations," he said. And sure they'll cut back on electricity or paper use, but the real answer is one many don't want to hear. "It is going to come down to the fact that there are going to be fewer people doing the jobs we have to do," McSwain said. McSwain estimates he'll have to cuts 10-15 jobs at Lamar. Not all will be teachers, but class size will certainly be affected. "Health, physical education -- those kinds of classes -- they're going to suffer; they're going to go on up," he said. These are all things he doesn't want to do, but it's crunch-time. "This is real. It is not just an HISD issue; this is a statewide issue and a nationwide issue," McSwain said. And while the principal here doesn't anticipate having to cut sports programs and the like, he says he will likely have to increase student fees, ask them to use old equipment and find their own rides to off-campus games activities. Principals across the district are facing the same decisions. Meantime, the teacher's union president calls some of this worst case scenario talk an overreaction, based on only the House's budget. The Senate will release its first draft next week.