With a budget shortfall of $5.7 billion, Washington state’s schools were hit hard this year — and Federal Way was no exception.

Gov. Chris Gregoire cut $800 million from K-12 education this year and Federal Way will lose a minimum of $5 million in funding.

That loss, coupled with increasing expenses such as cost-of-living expenses and pension increases, could lead to up to a $14 million shortfall.

Funding cut by Gregoire included cost-of-living adjustments for educators, funding that reduces class sizes and levy equalization grants.

“Facing budget cuts of this magnitude means that, for the first time, our vision of ‘all means all’ is in serious jeopardy of being stalled through personal and program reductions,” Superintendent Tom Murphy said in a statement.

The governor’s budget is not the final word, however, as state legislators still have to go through and make final decisions. Those decisions won’t be finalized until April.

Federal Way Public Schools must create its own 2009-2010 budget under the assumption that the district will be short of its usual funding.

Since the school district’s income is based on state and federal formulas as well as levy funds, the district is very limited in ways to increase its income. So instead, budget cuts must be made.

The district has not yet announced any programs that may be targeted. However, over the past decade the district has cut already cut programs such as elementary band and orchestra, librarians, custodians and other staff. District cuts now could include teachers and staff, which comprise 85 percent of the budget.

Any teachers facing a potential layoff must be notified by the school district by May 15.

State funding only covers what it deems “basic education.” The district has long fought the state funding levels and currently has a lawsuit against the state that’s currently on appeal and will surface in the state Supreme Court in the spring. However, any results from the lawsuit wouldn’t be seen until 2010.

The cut of at least $5 million is the largest single cut the Federal Way School District has seen.

Over the next several months, Murphy and district staff will meet with community groups to help the superintendent in creating a budget that he will present to the school board on April 28.

The board will then decide on the budget on June 23.