The Snoqualmie Valley School District is readying its plan to deal with an expected $3.5 million shortfall.

The district’s budget crisis has been compounded by Washington state’s budget deficit and slowed enrollment growth.

Roughly $1.5 million of the shortfall is a local deficit, and $2 million is the estimated reduction in state money caused by the state’s $9 billion deficit.

The state is expected to heavily cut education money from its budget. The state Senate majority leader’s chief of staff says 3,000 teachers and 3,000 college faculty could lose their jobs.

The first potential area for cutting costs will be non-employee related costs, according to the district’s Web site. However, cuts will also likely have to be made from non-teaching staff and, possibly, the teaching staff. In 2008-2009, 82 percent of the district’s general operating budget paid employee salaries and benefits.

“The goal is to keep the cuts as far away from what the kids feel in the classroom,” said Carolyn Malcolm, the district’s spokeswoman.

Respondents to a non-scientific survey conducted by the district identified class size, student services and instructional materials as the three highest priorities for spending. Around 900 people responded to the voluntary survey; 67 percent were parents and 21 percent were district employees.

Class size led by a wide margin among all respondents. District employees selected class size and student services as their top two priorities by a large margin.

Superintendent Joel Aune will present the district’s recommended cuts to the board on Thursday, April 2.

The district has to plan for a two-year window of tight budgets, because things are likely going to be difficult for at least two years, Aune said at the board’s meeting on Thursday, March 26.

The district might receive some federal stimulus money, but it is not being figured into the recommended cuts because of a lack clarity about how much districts will receive and what strings will be attached.

The district has a projected $1.025 million unreserved and unrestricted current fund balance, around two percent of its revenue. Several district officials said they would like to keep this money in case of emergencies.

“Traditionally this money is for a rainy day, and its raining,” Aune said.

The district is also carrying a surplus for Initiative 728, which supports 31 teachers in the Valley, but it will not use this money for other items because the state is expected to cut money for I-728 costs by 25 percent.

The budget crisis is the result of a “perfect storm” of increased state and federal requirements, increased student needs, increased community expectations, increased costs and decreasing local, state and federal revenue, according to Aune.

Unfunded and partially funded state and federal mandates cost the district up to $5 million each year. The state only pays for five periods a day and does not pay for extracurricular activities. The district also has to pay for the ongoing operating costs of Twin Falls Middle School, which enrollment growth had been expected to pay for. Additionally, the cost of energy, food, transportation and insurance, among other expenditures, have increased in recent years.