Albany is in fiscal crisis, and school districts are getting whacked.

Teacher layoffs, larger class sizes and reductions in classroom programs face schools

throughout the region next school year as the state's multibillion-dollar deficit hits home.

And despite those cuts, school property taxes may still go up.

As districts prepare their 2010-11 budgets, staff reductions and program cuts are the rule

rather than the exception.

"The face of public education as we know it is changing, and not for the better," said

Terry Ann Carbone, Lockport school superintendent. "We are in crisis, and Lockport is not

alone."

For example:

Lockport may close two elementary schools, cut more than 40 positions and end after-

school and summer programs. Even so, taxes could jump more than 10 percent.

West Seneca faces the elimination of as many as 50 jobs and reductions in student

busing. At the same time, the tax levy could jump nearly 4.6 percent.

Buffalo schools fear "draconian cuts" as they face a $34.2 million budget deficit.

Orchard Park's preliminary budget calls for the elimination of more than a dozen

jobs.

School closings are being considered in the City of Tonawanda, North Tonawanda, Lake

Shore and Allegany-Limestone.

The rules of school finance appear to have changed suddenly and dramatically.

For years, the governor proposed generous increases in state aid to schools, and the State

Legislature added millions of dollars on top of that.

State school aid increased 72 percent over the past decade, more than twice the rate of

inflation.

That pattern is coming to a jarring halt.

Gov. David A. Paterson last fall proposed a $700 million — or 5 percent — cut

in state school aid. When building aid is excluded, the cut comes to 6.7 percent. For many

school districts, the percentage cut is even greater.

And with the state's deficit now nearly three times greater than when Paterson called for

his cuts, there is little expectation that the Legislature will restore any money.

"In the old days, we always came in with a bailout," said Assemblyman Sam Hoyt, a Buffalo

Democrat. "I don't see that bailout happening this year. Cuts are absolutely inevitable."

In fact, school officials fear that the state's growing budget deficit will prompt midyear

cuts or even larger state aid reductions over the next few years.

Hoyt said teachers throughout the region, who have benefited from previous state aid hikes,

should help the state out of its "unprecedented fiscal crisis" by deferring or giving up step

increases or percentage pay hikes.

"In my opinion, that absolutely has to be part of the discussion," he said.

Kenmore-Town of Tonawanda Superintendent Mark P. Mondanaro returned his $7,000, or 4

percent, pay raise in an effort to facilitate teacher contract talks he said are headed for

impasse even as the district proposes staff reductions.

"I'm not grandstanding," he said. "It's time to move forward, together."

Almost without exception, school officials are proceeding on the assumption that Paterson's

proposed cuts will be adopted, and they are outlining cuts and layoffs to match them.

"It's almost like waiting for the results of a bad medical test," Carbone said. "We've got

to get people prepared as soon as possible."

The chemistry of school finance has been transformed.

"That's a major sea change," said Williamsville Superintendent Howard Smith. "Now we're

really fighting from a defensive position."

In addition, the statewide cuts are likely to have a more severe effect in the Buffalo

Niagara region because local districts have smaller rainy-day funds to cushion them, according

to the New York State School Boards Association.

In Erie and Niagara counties combined, 34 percent of the school districts would not be able

to cover their state aid losses even if they used up every dollar in their reserve funds

— savings set aside for emergencies, unforeseen expenditures or shortfalls in revenue.

Statewide, just 18 percent of New York's roughly 700 school districts do not have enough

rainy-day funds to cover proposed cuts.

And even local districts with substantial reserves are reluctant to spend them down because

the crisis is expected to intensify before it gets better.

Buffalo, which counts on Albany for about 80 percent of its funding, expects its budget

shortfall to soar from $34.2 million next year to $63.1 million in 2011-12 and $92.5 million

in 2012-13.

"We need some kind of changes — otherwise draconian cuts will be inevitable," said

Barbara J. Smith, the district's chief financial officer.

Superintendent James A. Williams said the district is focusing on 27 areas for potential

savings — all outside of instruction. "I want to hold the classrooms harmless," said

Williams, who outlined efforts that range from spreading out pension costs over multiple years

to finding ways to trim administrative costs.

Buffalo's control board raised concerns about the school district's long-term fiscal

outlook Thursday. Vice Chairwoman Alair Townsend said the state's fiscal crisis poses a

"tremendous challenge" to educators, parents and students.

East Aurora Superintendent James C. Bodziak, faced with a 9.4 percent loss in state aid, is

asking district unions for cost-saving givebacks to lessen what he considers inevitable

layoffs.

"We want to see if there's something that could be a win-win," he said. "It's water we

haven't crossed over before. In dire times you do dire things."

Even districts that are faring relatively well are running out of maneuvering room.

Williamsville, which receives just 21 percent of its revenues from the state, is hoping to

maintain its existing classroom programs while keeping its spending increase under 3 percent

and its tax levy hike under 2 percent.

That requires using $8.5 million in reserve funds and — for the second consecutive

year — deferring initiatives that would build on the district's academic program, Smith

said.

"I can do this for another year, but after that I'm going to be like everyone else," he

said.