ARLINGTON (CBSDFW.COM) – Falling property values are the newest challenge to area school districts as they try to set leaner budgets.

It's especially troubling for some Tarrant County schools.

The appraisal district estimates 49 percent of homeowners will see their property values drop this year, and with the state strapped for cash, school districts are searching for ways to make up for lost revenue.

"Your property values play a big role in determining your state aid," said Arlington ISD's Associate Superintendent of Finance, Cindy Powell. "School districts get a portion of the revenues from property taxes and a portion from state funding."

At South Davis Elementary School in Arlington, kindergartners are learning to read and write, but paying for their education is complicated math.

Although preliminary property values are up slightly within the district, administrators are projecting values will drop about 4 percent by the time the certified numbers are released in July.

When a district's property values go up, there is a corresponding decrease in its state funding.

When property values decrease, so does a district's tax revenue. That's when the state steps in to provide more funding to the district.

That formula is essentially supposed to keep funding equal across the board.

"There is a vast disparity across the state between districts," Powell said. "Some districts have a lot of property wealth some do not have a lot of property wealth."

State lawmakers are already looking at major cuts to public education, and with nearly half of Tarrant County homes dropping in value for the second straight year, tax revenue and state funding are taking a hit.

Some school districts, like Keller ISD, are considering a special tax ratification election this summer to raise the property tax rate to make up for some of the money they're losing.

While Arlington ISD administrators said they're not at that point yet, a projected $14.3 million dollar shortfall is still looming. Meaning, there is still major concern about the impact it could have in the classroom.

"Everybody is sustaining some amount of cuts," Powell said.

The Tarrant Appraisal District won't release final certified numbers until July.

Dallas County has yet to release its preliminary property appraisal information. Denton and Collin Counties have.

Denton's estimates are up nearly three percent, credited to rapid growth. Collin County, also growing, is not in the same boat.

Estimated tax appraisals are down 0.7 percent from 2010.