Raleigh, N.C. — State budget deficits are forcing schools to return $58 million in state funding.

In Wake County, the school system is being asked to return $5.4 million that the state had allocated to it.

“(It) sounds like a necessary step because of our present economy. My humble opinion is (that) this is just the beginning,” county school board member Ron Margiotta said.

A request by the Wake County manager to cut an additional $5.7 million in county funding means the school system will be facing $11 million in cuts.

County money accounts for a third of the school system's budget. The state supplies 61 percent, and the federal government provides 6 percent.

“This will not be easy because we are a lean organization,” Superintendent Del Burns said after a committee meeting Tuesday.

Burns said student population fell short of projected enrollment, which ended up costing the school system money.

“Ultimately, any reduction in our funding will have either a direct or indirect impact on classrooms and students,” Burns said.

Margiotta stopped short of saying jobs will be cut, but did say administrators should consider leaving some open positions unfilled.

The school system has to tell the state where it will make cuts by Dec. 19.

In July, the Wake County Board of Commissioners allotted the Wake County Public School System $319.2 million in the county budget for the 2008-2009 school year – nearly $36 million less than what the school board had requested.

In Wake County, the projected $17 million shortfall caused an across-the-board hiring freeze. County Manager David Cooke has also halted all travel by county employees, except for trips that had already been arranged.

Financial projections show sales tax collections in the county will be down about $6.5 million as people cut back on spending, Cooke said last month. A deflated housing market will likely result in the county collecting about $6.4 million less in deed stamps on real estate sales, he said.

The projected losses also include at least $3 million from the 3 percent budget cuts Gov. Mike Easley has ordered from state agencies, Cooke said.

On Oct. 21, Wake County commissioners decided to make an additional $80 million available for school projects that were shorted funds after the county was unable to sell bonds. Several weeks earlier, commissioners had voted to float a short-term, $300 million bond anticipation note to fund projects that had already started and to carry the county until the markets improved enough for a regular bond sale.

Officials said the $80 million, which would have been used for funding later in the building process, meant that multiyear assignment plans could be handed out. The money also funded a program to computers and technology up to date.