"The reality is that the General Assembly is continuing to decrease funding for education," said Steven Ballowe after the City Board of Education had wrapped up a 4´-hour retreat. "It's going to be another tough budget year."

Budget issues dominated the school board's meeting to discuss a range of pressing issues in the school system. The meeting took place at the Best Western Lanier Centre Hotel on E.E. Butler Parkway.

The city's tax rate is now 7.48 mills, with 1 mill equal to $1 in taxes for each $1,000 of assessed property value. The tax rate covers both bond-issue payments and maintenance and operation.

School board members, Ballowe and finance director Angela Parsons talked about the possibility of raising the tax rate to 8 mills. A half-mill increase would raise about $1.4 million.

In addition, as a cost-saving measure, the system is looking at increasing caps on class sizes.

Kindergarten class sizes would remain at no larger than 20 students, or the maximum allowed by the state. Class-size maximums would increase from 23 to 24 students for first through third grades and from 25 to 26 for fourth and fifth grades, Ballowe said.

The state allows up to 28 students in second through fifth grades.

Ballowe said the system likely will have to hire more teachers to make up for projected enrollment growth.

However, raising the maximum class sizes would cut down that number and, consequently, the additional amount the system would have to pay in salaries and benefits.

The school system is working with a tight budget this fiscal year, which ends June 30, largely because of state cuts last year.

The board had to pull from its reserves to meet this year's budget.

"I would like to see us not take any from surplus next year," said Parsons, who has asked principals to trim 7 percent from next year's budgets.

Financial woes continue to plague the state, which could impose another 2.5 percent cut in education funding this budget year and then an additional 5 percent for the 2004-05 year.

The Legislature also is considering giving all teachers a 2 percent raise and teachers with 20 or more years of experience an additional longevity step that carries a 3 percent raise.

Parsons said there is talk, however, about the Legislature delaying the raises from September to January.

Still, any hike in pay is better than this year's freeze in pay. But it also means another expected strain on school budgets.

"The state has never given us full funding for a salary increase," said school board member Kelvin Simmons, who has served on the city board since 1991.

Ballowe said that 80 percent of the school's teachers could end up receiving a longevity increase.

State-approved increases affect only the state portion of a teacher's pay. The school board also has to consider what to do with the local portion.

"We could freeze the local supplement," said board Chairman Frank Harben.

Parsons said she plans to present a preliminary budget to the school board in April and hopes to gain tentative approval in May.

Overall, "We're wrestling with how to fund our programs," Ballowe said. "We are looking to maintain what we have and not backtrack."