Voters in Boundary County, Idaho, voted Tuesday to keep Naples Elementary School open.
Unofficial results showed 58 percent of voters supported keeping the school, with 42 percent voting for closure.
The Boundary County School District had proposed closing the school as a way to deal with a reduction in state funding.
Closing Naples would save the district about $250,000 a year.
If the proposal had passed, the 123 Naples students would have been bused nine miles to Valley View Elementary in Bonners Ferry.
Usually a school closure is determined by a school board vote, but when Naples Elementary consolidated into the Boundary County School District in 1947, it was written into law that the school could only be closed through a countywide vote.
The school district declared a financial emergency in late March, following a decrease in state funding of 7.5 percent for 2011. According to previous news stories, the Boundary County School District has already cut its budget for 2011 by more than $500,000 but there is still a deficit.
Boundary County schools already operate on a four-day week because of earlier cuts.
The election results released Tuesday are unofficial until approved by the school district Board of Trustees.
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