Rulffes thinks that if the state funding is rescinded, the district still would be obligated to pay for the increases.

District general counsel Bill Hoffman agrees.

"It certainly raises an interesting legal question," Hoffman said.

Legislators approved funding for cost-of-living salary increases for teachers, state workers and university employees in 2007. Shortfalls in projected state revenues have Gov. Jim Gibbons reconsidering the 4 percent increase.

On Monday, one state government source indicated that Gibbons might call a special session of the Legislature to reduce the raise to 2 percent, which would save the state $65 million.

State officials are waiting for a report on the March sales tax receipts before deciding whether a special session is needed.

The Clark County Education Association, which bargains for district teachers, is ratifying a contract that includes the 4 percent raises, union Executive Director John Jasonek said. The final vote will not be tallied until Saturday.

Once teachers ratify the deal, School Board members will be asked to approve it.

If the Legislature rescinds state funding for the salary increases, Rulffes said, the district would have to cut student programs to absorb the cost of the raises locally. District officials declined to specify which programs would be considered for cuts.

And more calls to reduce planned budgets might be coming. Gibbons has asked Nevada school districts to pare back budgets for 2009-10 and 2010-11 by 14 percent each year from projected budget levels. The Clark County district's share of that amounts to $106 million less a year.

"It's pretty traumatic," Rulffes said. "It would equate to a (loss of) over 2,000 positions."

Because salaries make up about 80 percent of the operating budget, Rulffes said the district would be forced to cut its work force, which includes teachers, school bus drivers, maintenance workers and other support staff.

"You have to make the cuts where the dollars are spent," Rulffes said.

Clark County's school district is the fifth-largest one in the nation, with more than 308,000 students. Its growth has slowed this year to 1.5 percent, which amounts to 6,000 new students. The 2008-09 district operating budget of $2.72 billion represents a 7 percent increase over the current budget.

Officials said they are being squeezed between the cuts and population growth.

"We're in the terrible dilemma of recruiting teachers for next year because of growth, but at the same time, we're facing budget cuts," Rulffes said.

The upcoming school year's budget already includes a 4.5 percent cut requested by the state, Rulffes said. The school district is setting aside $5 million in anticipation of additional revenue shortfalls.

Jim McIntosh, the district's deputy chief financial officer, identified "two bright spots" in the 2008-09 budget.

The Nevada Department of Education has increased per-pupil funding by $8, netting the school district an additional $2.6 million. The adjustment was made because Clark County qualified for additional money under the state's school funding formula because of poor economic conditions.

Also, the district has been able reallocate $5 million within the budget to restore teacher purchasing cards, which allow teachers to buy $200 in classroom supplies.

"All we can do is live on hope around here," said Bill Sampson, the director of the budget.

Contact reporter James Haug at jhaug @reviewjournal.com or 702-383-4686.