Lawrence school officials were expecting a rainy day, not a deluge, when they prepared a $500,000 reserve to cope with a possible 1 percent state budget cut.

But with the state budget gap for the current spending year now pegged around $275 million and the governor-elect just starting to figure out the gravity of the state’s fiscal problems, district officials are talking about layoffs and furloughs when the rainy-day reserve is exhausted.

“We’re going to have to make further plans for potential cutbacks,” said Austin Turney, the Lawrence board’s vice president. “And they’re going to be ugly ones, like laying off classified employees or putting them on leave until the end of the school year.”

Supt. Randy Weseman said Wednesday that the Lawrence public school district had prepared for a 1 percent state budget cut in January.

Now, he doubts the district’s $500,000 kitty will suffice.

“Everyone who knows something about (the state budget) uses terms like ‘worse than we thought’ and ‘severe,'” he said.

Absent a stunning economic recovery or a huge tax increase in early 2003, the district’s hiring freeze and other cost-containment efforts won’t equal spending reductions Gov. Bill Graves or Gov.-elect Kathleen Sebelius could make in light of the projected $275 million deficit by June.

The district’s 770 classified workers  janitors and cooks, for example  are “at-will” employees who can be dismissed at any time. The district’s 930 educators, or certified staff, are under contract until July.

In August, Graves reduced state general fund appropriations to the 303 Kansas public school districts by $27 per pupil. That put base state aid to districts at $3,863 per student. In 1993, base state aid was $3,600.

Mark Tallman, lobbyist for the Kansas Association of School Boards in Topeka, said it would be “all but impossible” for any governor to shield public education from spending reductions if the deficit predictions held true.

He estimated public education’s share of state cuts could be higher than $200 per pupil.

Weseman said multimillion-dollar cuts in state aid would jeopardize the quality of students’ education.

“The net effect is … fundamental changes in what we’ve come to know as public education,” he said.

Weseman said state cuts would put pressure on the district’s general fund, which pays for employee salaries and instructional materials.

It won’t harm the district’s capital fund, which covers building repairs and equipment purchases.

Scott Morgan, the board’s president, said the Lawrence district’s situation was worse than some, because it had experienced enrollment declines. The 10,000-student district enrolled 180 fewer children this year.

“It puts everything in a very stark light in terms of where our money is going,” he said. “The priority will be students in the classroom.”

The school board already ordered a hiring freeze, borrowed from its contingency fund and asked administrators to search for other ways to save money in August.

Weseman said new budget woes could speed consideration of school consolidation.

The board tentatively selected Riverside, East Heights and Centennial elementary schools for closure, but tied that to a 2003 bond issue to finance at least $50 million in school construction and renovation.

“Small schools may not be a luxury we can afford anymore,” Weseman said.

Turney said the Legislature and Sebelius should resolve the school budget situation within two weeks of the session opening in January.

“The longer we’re in suspense, the options drop off one by one,” Turney said.