Lancaster Central School District administrators propose cutting two elementary school teaching positions for 2013-14 in response to declining enrollment in the lower grades.

School officials also would add one teacher for hearing-impaired students and one technology support staff member under a preliminary $47.7 million instructional budget, which was unveiled at Monday night’s School Board work session.

The instructional budget, the largest part of the district’s overall spending plan, would rise by 5.4 percent from the current school year, driven largely by negotiated staff raises.

But district officials cautioned that some of the increase is due to the district absorbing $727,299 in costs that had been covered over the last three years by a now-expired federal stimulus grant. “A couple of years ago, we were allowed to relieve the general fund of these positions, and now they’re coming back,” Jamie L. Phillips, assistant superintendent of business and support services, said at the session in the former Central Avenue Elementary School.

The session was the third the board has held to cover spending in sections of the proposed 2013-14 budget. At their March 11 session, officials will complete their review of district spending and for the first time publicly address how much revenue the district plans to draw from reserves, property taxes and other means.

“Just so everyone understands: This is nowhere near the final budget. This is the beginning of the process,” School Board President Kenneth E. Graber said.

The $45.32 million now in the instructional budget, which includes salaries for teachers and support staff, accounts for half of the $91.5 million overall budget. Spending in this section would rise by $2.45 million in 2013-14 under the preliminary plan.

But Phillips said $727,299 of this increase is a result of 16 full-time-equivalent staff positions returning to the general fund budget after the three-year period when federal economic-stimulus grants covered their costs. This follows last year’s loss of a $1.7 million, one-time federal stimulus grant.

The positions returning to the general budget this year include speech therapists, reading specialists and a social worker. Graber observed that the district saves money by keeping those services in-house.

The instructional budget for 2013-14 would rise by 3.8 percent, or $1.72 million, without the effect of the lost federal aid.

All district teachers are receiving a negotiated 4.64 percent salary increase, while noninstructional staff is getting a negotiated 3 percent raise. The district is negotiating a new contract with its principals, while top administrators will get a $3,000 raise, Phillips said after the meeting.

To offset the higher costs, officials cut or rejected requested increases in spending on materials and supplies, equipment and other nonmandated items, Superintendent Edward J. Myszka told board members. “We did cut, internally, $675,000,” he said.

Officials did not identify the two elementary school teachers who would be laid off under the preliminary plan but did say the decision was driven by a drop in enrollment.