MISHAWAKA — Frustration is taking over at school corporations across the state, as board members face the tough task of making up millions of dollars in state funding that's suddenly been cut off. In Mishawaka, board members learned Thursday that they may have no other choice but to make those cuts in personnel. By the end of 2010, the reductions in state funding will add up to a total cut of 3.5 percent to every school corporation across the state. Governor Mitch Daniels (R) said the state had no choice but to act quickly after updated state revenue forecasts projected a $1.8 billion shortfall this fiscal year. "We reduced everything else first, and much more deeply. But, K-12 education is half the entire budget and it became unavoidable for it to become part of the solution," Daniels said. Spending on K-12 education adds up to about $6.4 billion each year. The current state budget had given schools a 1% increase in spending for fiscal year 2010 and slightly less than that for 2011. Those increases will now be wiped out, and spending will be cut by an additional 2.5 percent, for a total cut of 3.5 percent. The sudden reductions have left some school corporations scrambling to figure out where to cut. In Mishawaka, school board members and administrators held a working session Thursday night to see how much the cuts will impact them. The answers they found, said School City of Mishawaka School Board President Larry Stillson, will soon create some "terribly tough decisions ahead." Mishawaka's Situation Mishawaka Schools stand to lose around $1.5 million in 2010 because of the new education funding cuts. But, Superintendent R. Steven Mills told board members that the true impact in lost funding will be closer to $2.3 million, because Mishawaka's state funding formula dropped by about $845,000 this year. It's not the first time board members have faced a budget hole that big. In 2006, they faced a $2.4 million budget deficit, and were able to provide a balanced budget through creative cuts. But, over the last three years since then, the district's enrollment has dropped by 230 students, creating an additional loss in per-student state funding of $450,000. Add to that a loss of about $400,000 in interest from market losses and other economic factors, and the total deficit facing Mishawaka schools will be about $4.6 million this year. That's equivalent to nearly 8% of School City of Mishawaka's entire General Fund budget. Cutting that much won't be easy. "It's a very formidable task, to say the least," said Mills. "We're going to have to look at how we can get leaner while continuing to do the same things we're doing for our students. It'll be tough. It won't be fun." Future Fears Talk of the impending deficit has had the rumor mill churning at schools across the district for the last few weeks. "The rumors have been going, definitely," said Mishawaka High School World History Teacher Chris Kowalewski, who also coaches the school's cross-country and track teams. "There's a lot of teachers in the lounge talking, and it does have us concerned. We're worried about our scheduling. We're worried about the teachers that have been here only a couple of years," he continued. Still, amidst the uneasiness, Kowalewski says there's also a feeling of optimism. "We're going to trust that our administrators are going to try to keep the staff the way we can, and that they're going to approach all avenues without laying off teachers," he said. At Thursday's meeting, administrators weren't so sure that can be done. With more than 80% of year-to-year budgets spent on personnel, Mills said there's likely no way to avoid deep layoffs. "I don't think so," he said, when asked if layoffs could be avoided. "I wish I could say yes, but it's just too much of a number to overcome." Asked how many jobs might be on the chopping block, Mills said he had no idea yet, as board members are just beginning to analyze the impact of the funding cuts. "But, one or two is a substantial number when you're the one or two. Unfortunately, one or two isn't going to solve the problem. We're going to look at all areas. I don't think any area will go untouched," Mills said. But, Indiana State Superintendent of Public Instruction Dr. Tony Bennett disagrees. He says cuts can be made without directly impacting the classroom. A Different Solution? "Any district can find two or three percent savings without reducing teacher staff. If everyone, including teachers themselves will pitch in, we'll get through this recession just fine," Bennett said in a news release following the announcement of the funding cuts. At the direction of the Governor, Indiana's State Board of Education released a "checklist" of suggestions, meant to help school corporations attain the cuts without laying off teachers. Among them: -Hiring freezes -Pay freezes for all school corporation employees -Examination of school corporation insurance plans -Shared services between school corporations -Limiting school board members’ benefits -Reduction of travel expenses, association dues and fees -Closure of underutilized buildings and sale of unused buildings To view the full checklist, click here. But, adopting some of the suggestions on the checklist--including the freezing of salaries and benefits--could be tricky. Most school employees are under contract, and unless union members agree to voluntary freezes or reductions, terms of the contract would remain until the next round of negotiations. In South Bend, that would be this summer. In Mishawaka, it wouldn't be until December of 2010. "We just finished our contract in December, and we didn't take a pay increase or percentage increase. We did get a $200 stipend to cover increased insurance costs," said Mishawaka Education Association President Bruce Shannon. Asked whether cuts could be made without impacting teachers in the classroom--as Bennett suggested--Shannon paused. "That's not the reality of real schools. Unfortunately, it looks like that's going to happen. We're going to have to cut some positions," Shannon said. The problem in Mishawaka schools, he said, is that most of that checklist has already been "checked off." "I feel like we're the working family who just had their mother and father laid off. We did all the right things. We've saved money. We don't have a large cash balance. We've paid our bills and taken care of our insurance. We feel like we've been blindsided," Shannon said. The Bottom Line "Without impacting personnel in this school corporation, it can't be done," said Stillson. Asked if he agreed with Bennett's assessment that cuts of three percent can be made without teacher layoffs, Stillson shook his head. "First of all, it's not three percent. It's more than double that. And, no. No, no, no. Come on! Anybody that professes to say that's true, well, they're not telling you the truth," he said. "It's not just us. I'm on the board of directors for the Indiana School Board Association. We met this weekend. One corporation's cutting 80 teachers. One corporation is closing schools. It's going to have an impact across the state," Stillson said. So, what other solutions are out there? Search For Solutions Money from the Obama administration's Race to the Top program--proposed by Secretary of Education Arne Duncan--won't be able to plug the gap. It's "one-time" funding, that's not even guaranteed to come to Mishawaka, said Stillson. If it does, it has to be spent the way the federal government dictates. With wage freezes out as an option, what about voluntary pay cuts to avoid widespread layoffs? Shannon didn't dismiss the idea, but called it "highly unlikely." But, Kowalewski says it's worth considering. "It would be tough. A lot of teachers have been talking, and we feel like we've been tightening our belts for the last couple of years. But, if we have to tighten our belts for a year or two so everyone can keep their jobs, then that's a better option than laying off people who would be unemployed," he said. In the meantime, Kowalewski and hundreds of other teachers will be left in "limbo," wondering what their futures hold. "It is making a lot of teachers nervous. It is making a lot of administrators nervous. There is talk," he said. That talk will continue for at least the next few weeks. Administrators wouldn't talk specifics about potential cuts Thursday, saying they plan to meet with those who might be affected before making any final decision. They hope to issue that decision by the end of March. "This is not fun," said Stillson. "This is torture. Some of the things we have to do, and we're going to do bring tears to my eyes."