The Cherokee County School District faces a projected budget deficit up to $6 million for the 2007- 2008 school year.

Superintendent Dr. Bill James said the deficit is due to not maintaining the Education Improvement Act's local tax effort rate, a decline in county property values and the impact of state budget cuts since 2004.

A new state property tax law limits the ability of school boards to raise taxes. Effective last July, school tax hikes are limited to the consumer price index and the county's population growth.

Any millage increase for Cherokee County schools is capped at 3.23 percent this year.

The school board has not approved a tax increase since 2002 when taxpayers were hit with a 23.5 mill tax hike.

"The school district has not increased local revenue at the same rate as state funding for the past four years. We would need another $5 million per year to meet this state requirement," James said. "Each year the district has applied for and received a waiver from the state Department of Education, even though state law only allows for a waiver every other year."

Budget revenues are currently estimated at $57.1 million in preliminary budget documents, according to James. Without any new personnel or programs, the district's current budget draft shows $60 million in expenses.

By law, the state's minimum teacher salary and teacher raises are set by the General Assembly.

This year's 3.3 percent state teacher raise will cost $1.7 million to fund in this year's budget. Overall, personnel salaries and benefits account for $52 million of this year's proposed expenses.

The district will present a balanced budget to the school board for approval in June, James said. School trustees will be asked for their budget priorities at this Tuesday's meeting.

Potential savings in the new budget could come from shifting some expenses to the district's capital project and debt service funds. James said he will recommend the district postpone plans to lease additional computers for a year.

These proposed savings would provide the district with another $1.5 million that could be spent elsewhere.

In addition, James said the school district could accept six mills from the state to help offset revenues lost because of homeowner property tax relief. This would generate an estimated $869,880 in revenue for the budget.

Even with the additional revenue, James said county schools will continue to operate next school year under a lean budget that emphasizes keeping people's jobs over new toys for the classroom.

"We will spend the next couple months paring down the requests for new personnel and programs based on what we can afford," James said. "Many schools received a significant amount of money from grants this school year. We will continue to look to grants and federal money to provide new things for schools."

County schools received $8.4 million in federal and state grants this past school year. Those grants included $2.6 million in Title 1 programs for high poverty schools, $600,000 for a S.C. Reading First program and school improvement funds from the state's Education Accountability Act.