From $2.3 million on the low side to $3.4 million on the high side, the Federal Way School District stands to lose a lot of money as politicians in Olympia cut spending to stave off the state’s own budget deficit.

That is, the state’s current year budget deficit. The pain from cuts to the next state budget year, which starts July 1, will come later.

Sally McLean, assistant superintendent of business affairs, gave a presentation at Tuesday’s school board meeting projecting the district could lose $2.7 million in 2010-11 as a result of state cuts.

It’s the equivalent of getting a paycheck, and then being forced to give some of the money back.

The district’s 2010-11 budget is what pays the bills at the moment; it went into effect on Sept. 1, 2010. The next budget year, 2011-12, begins on Sept. 1 of this year. The Legislature and the governor are hammering out a solution to the state’s current year budget gap. McLean’s projections are based on a plan in the House of Representatives to cut state spending. McLean projected another plan by the governor would affect Federal Way to the tune $3.4 million; the Senate’s plan cuts $2.3 million.

The projected $2.7 million loss comes from cuts to several programs. The biggest chunk at $2.1 million would come from the state reducing teacher-to-student ratios in grades kindergarten through 4. Right now, the state provides money for 53.2 teachers per 1,000 students in grades kindergarten through 3; the ratio is 47.43 per 1,000 for grade 4. The House plan would reduce those ratios to 49 and 46, respectively.

The district might also lose $200,000 in school meal aid and $400,000 from school Medicaid assistance.

Though it’s not a long-term solution, McLean said the schools could use $2.7 million from reserve funds to pay for losses in the current budget year. The 2010-11 fiscal plan the district adopted last summer budgeted $12.1 million in reserve funds. McLean said that number ended up being more, so the district has around $14.8 million in reserve funds. Subtract those two numbers and you get what McLean called a “coincidence:” $2.7 million.

Budget problems

The $2.7 current year gap differs from a projected $8 million gap that the district might face in the next budget year, 2011-12.

The state is dealing with two budget gaps, both of which affect Federal Way: one that it’s operating in at this moment, and one that it will face in the 2011-13 budget biennium — the two-year budget cycle on which the state operates.

In the first budget year of the next biennium, which encompasses one separate Federal Way budget year, the district is looking at a potential $3.1 million loss in state funds. That number is comprised of cuts to K-4 teacher ratio funding, a loss of some levy equalization reimbursement and reduced Medicaid funding.

The remainder of that projected $8 million gap is because federal stimulus money — the stimulus funding “cliff” — will be gone by the end of this budget year.

Like the current budget year shortfall, next year’s gap could be staunched using reserve funds.

“We have stated all along that we believe that we can ‘absorb’ this year’s state funding reductions through the use of (reserve funds),” McLean wrote in an email. “To the extent we need to use these funds this year, we have less flexibility to address changes in revenues and expenditures in (the budget year) 2011-12.”