ATLANTA - One look at his budget and Jim Holton knew he'd have to cut one of the few non-classroom jobs in his tiny school district in rural east Georgia.

Though the graduation coach - a counselor who focuses on students at risk of dropping out - had only been in place a couple of years, Holton decided to use the salary to avoid laying off a teacher in the 600-student Glascock County school district this year.

"It was very simple. It was all about the funding," Holton said. "There wasn't a choice."

School districts across Georgia have made the same decision - at least 170 graduation coach jobs out of 840 have been cut since last year, according to state figures. And those numbers will likely only get worse as the state continues to slash millions from school budgets amid the worst economic slump in decades, school officials said.

The program could get an infusion of money if Georgia is successful in getting some of the $4 billion in highly competitive Race to the Top federal funding, which will be announced in the spring. The coach program was touted in the state's application for the money as a successful and innovative tactic for increasing the number of high school graduates.

Gov. Sonny Perdue started the graduation coach program in 2006 in hopes of raising the state's high school graduation rate. Late last year, he credited the program with a 10 percent decrease in high school dropouts in Georgia for two years in a row. The state's graduation rate rose from 72 percent in 2007 to 79 percent last year.

For two years, the program was funded as a line item, which meant school districts had to use the money for graduation coaches. But last year, Perdue moved the $40 million for the program into the general pot of money for schools, which meant districts had a choice of what to do with the funding.

Perdue's spokesman, Bert Brantley, said the governor isn't disappointed with the cuts in the program because the majority of districts decided to keep the coaches.

"These are unprecedented times and schools are having to make decisions that are unprecedented," Brantley said.

For some districts - particularly rural ones that tend to be smaller and poorer - the graduation coach money has helped ease the pain of massive cuts in state dollars for schools. And it helped prevent teacher layoffs, though many state education officials say that won't likely be the case this year.

"You can cut all the copy paper you want and you can change all the light bulbs to lower wattage, but the only real area for dramatic reductions in spending is in the staff line," said Jim Puckett, who works for the Georgia School Boards Association.

The graduation coaches work with students on the verge of dropping out to help them catch up in their classes, get a diploma and explore post-high school options like a community or technical college. Often, the students have fallen through the cracks and simply need the one-on-one attention the graduation coaches can give to help get them back on track, school officials said.