Topeka ? Lawrence school district officials said Monday they expect they will have to repay nearly $672,000 in state aid by the end of this fiscal year because of the new “block grant” school finance law that Republican Gov. Sam Brownback signed into law last month.

That could mean a hiring freeze for nonteaching staff for the rest of this year, Superintendent Rick Doll said, as well as fewer teachers and larger class sizes in some buildings next year.

But Kansas State Department of Education officials said that may not be the case, depending on what House and Senate budget negotiators decide when they return for the final wrap-up session April 29.

“We think that with resignations and retirements, we won’t have to non-renew any teachers for budget reasons,” Doll said.

He said the Lawrence school board will discuss possible responses to the funding cuts when it receives an update on the budget during its next meeting on April 13.

“It’s not going to be pleasant,” Doll said.

The new funding system reduces the amount of state “equalization” aid that Lawrence receives for its capital outlay and local option budgets. Equalization aid is a kind of state subsidy that holds down property tax rates in districts with less property valuation per-pupil than wealthier districts.

The new school funding bill was passed separately from the overall state budget, which lawmakers are still working on.

The school funding law took effect when it was published Thursday in the Kansas Register, and it applies to funding that all districts receive for the remainder of this fiscal year and for the next two fiscal years.

Because of that, state and district officials said, the Lawrence district has already received more capital outlay and local option budget state aid than it is entitled to under the new formula. That means it not only won’t get any more of that aid for the rest of the year, but it may actually have to pay back some of the money it has already received and spent.

According to the Department of Education, the new law cuts $1.6 million of the Lawrence district’s local option budget aid. But the district has already received more than it’s entitled to under the new law, meaning it may have to repay $494,657.

In addition, the new law changes the way district wealth is calculated. Under the new system, Lawrence no longer qualifies for capital outlay state aid, meaning it may have to repay the $177,300 it has already received.

Lawrence is one of several school districts in the state facing the possibility of having to repay money they have already received and spent.

But Deputy Education Commissioner Dale Dennis said there is a possibility that those districts won’t have to repay the money. That’s because House and Senate negotiators working on the overall state budget have so far agreed to a provision that would say districts will not be required to repay any over-payments they received this year.

“It’s been agreed by both sides, but it has not been approved yet by the House or the Senate,” Dennis said.

Last Thursday, the final day of the regular session, the budget conference committee reached an agreement on a preliminary budget. But the committee did not advance the bill to the House and Senate floors, which means the bill is still in the committee and is still subject to change.

Republican leaders said Thursday that they want to wait until after new consensus revenue estimates are released later this month so they will know how much additional revenue the state will need to fund the budget.

Based on current estimates, lawmakers would need to raise at least $224 million in new taxes next year to fund the conference committee’s budget. That number could change, up or down, based on the revised estimates that are released April 20.