The North Kitsap School District could make deep staff cuts this year as enrollment declines and state money for education is reduced.

The district faces an estimated $3,060,000 funding shortfall for the 2011-2012 year, according to a preliminary report discussed at a budget study session last week. Two community hearings are scheduled for January to discuss potential cuts.

The district expects to have 31.84 more full time equivalent (FTE) certificated positions than the state has allocated for in the next school year.

Overstaffing is a result of continued declines in enrollment — 182 fewer students are expected to enroll next year — and teachers returning from leaves of absence. In addition, Initiative 728, which provided additional money to reduce class sizes in grades kindergarten through fourth, was cut by the Legislature in 2010.

If the district eliminated the 31.84 FTE staff positions, it would still be left with a $600,000 shortfall.

“It’s obvious we have to cut staff, we don’t have a choice,” said Superintendent Richard Jones at the Wednesday meeting.

Because of union agreements, teaching staff can’t be cut until the end of the school year. To avoid cuts to classified staff, Jones said the district will need to dip into its reserve funds. The district expects to have $2,641,296 at the end of August.

“We can get through the year with our reserves,” Jones said. “I would rather tell employees they will not have a job next year, instead of ‘you will not have a job in 30 days.'”

In addition to tapping reserves, the district administration is considering a $133,700 budget cut. These cuts include funding for almost every department in the district, including:

Teaching and learning (professional development, credit retrieval/ NovaNet, office supplies), saving an estimated $65,000;

Special Education (professional development, supplies, assisted technology, occupational therapy equipment, consultant, deaf education), saving $24,000;

Maintenance and Operations (custodial reductions), saving $20,000;

Transportation (professional development/ travel), savings $6,500;

Human Resources (NERC reduction), saving $4,700;

Business Department (Supplies), saving $5,000;

Superintendent’s Office (Professional development/ travel, catering at meetings, supplies), saving $8,000.

The cuts are planned to be approved before the end of the 2011 school year.

Community hearings are scheduled to take place to give the board an idea of what cuts will have the lowest impact on families. The first meeting will be held at 7 p.m. Jan. 19 at the Kingston High School library. The second will be held at 7 p.m. Jan. 20 in the North Kitsap High School library.

Medical support for special needs students already cut

While the district faces a harsh reality of layoffs for the next school year, it must find ways to continue funding essential programs.

As of Jan. 1, reimbursement from Medicaid for school-based special education medical services was cut.

Though administration knew the reimbursement might be cut, it has created a gap the district is forced to fill.

“There were rumors that it was one of the things being cut, so it’s not a surprise,” said Director of Special Services Dorothy Siskin. “But it is still unwelcome.”

In 2010, the district received $36,247 for reimbursable services. Those services include: speech therapy, occupational therapy, physical therapy, audiology, nursing services, counseling services and psychological assessments.

Medicaid will continue to cover these therapies from community providers for children.

Despite no longer being reimbursed, the district must still provide the same services as before, Siskin said. The cut does not affect staffing.

“The sad thing is that all our sources of revenue are drying up,” Siskin said. “ We still have an obligation to the students.”