The Highline School District has been passing its levies pretty easily lately.

But with the recent economic downturn, that might not save the district's 2009-10 budget from taking a bad beating.

District finance director Susan Smith Leland told board members Dec.10 that anticipated state-funding cuts could result in a budget shortfall of up to $14 million.

That would affect district revenues in the same way as if the district had failed to pass its levy two years in row, Leland noted.

Vulnerable programs she identified include Intiative-728 funded projects, kindergarten through fourth grade education, full-day kindergarten, math and science planning days and gifted education.

"There are no easy cuts," Leland declared. "We have high-level expectations without state or federal support."

Pension and benefit costs are still rising but the district has no ability to control those costs, Leland added.

School officials are awaiting the governor's proposed state budget expected to be announced this week. Highline administrators are projecting, at best, a revenue shortfall of $5 million.

Leland pledged that the district's upcoming budget will support the vision of preparing all students for college, career and citizenship.

She said the district is in the process of creating a transparent and inclusive process for determining budget reductions that will include community input. The board will adopt the budget for the 2009-10 school year in August The school year starts in September.

Highline is beginning the 2008-09 fiscal year with a balanced budget, Leland reported.

However, the district expects reduced revenue from the state and county so is taking steps to cut expenses.

Mid-year budget reductions to be instituted in the next month include eliminating out-of-state travel, hiring subject to Superintendent John Welch's approval, freezing or elimination of some positions, and maximizing of Medicaid match reimbursements.

"The state cuts are unprecedented," Leland said.

Dealing with the cuts "will require the best of us," Leland told board members.

Because of increased fuel and other costs as well as investment losses, Highline's unallocated funds balance for the 2007-08 budget fell below the 3 percent minimum required by board policy, Leland said. The unallocated fund contains funds that are unreserved or undesignated.

The current balance is $3 million, which is 2.2 percent of the overall budget. The district must restore $1.3 million to raise the balance up to $4.3 million.

The district plans to restore the balance by cutting $700,000 each year over the next two years, Leland added.

The district lost $2.9 million in King County's shared investment pool, according to Leland.

"We were not thrilled to make that write-off," Leland remarked.

Board members also heard from seven parents and teachers requesting improvements in the district's music programs--particularly in middle schools.

Music teacher Sandra Locklear said surrounding school districts have thriving arts education programs.

Locklear called for arts and music instruction to be scheduled within the school day, programs determined by central administration instead of by principals, rehiring of a fine arts coordinator and reinstatement of cut programs.

Pacific Middle Choir teacher Jeffrey Steen said he opposes "site-based management" in which building principals have control over elective programs. He said principals who do not like a class or teacher can cut the program or manipulate them so they are dropped.

Welch said he is considering forming an arts council made up of district staff and community members. He also suggested setting up partnerships with organizations to support arts education.

Board members also unanimously elected Bernie Dorsey as board president for the coming year. Dorsey, who has served as vice president, replaces Julie Burr Spani.

Sil Savusa was also unanimously selected as vice president.