Fayette educators

are crossing their fingers and hoping for the best as they approach the

task of writing the 2003 budget.

Things are

kind of shaky right now, said Jim Stephens, comptroller for the county

Board of Education.

"The situation

is going to be more difficult than it has been in other years," Stephens

told the board during a special called meeting Monday.

He also recommended

and the board unanimously approved a $2.5 million midyear hike in the

2002 budget, accepting $2.5 million more in state funding and plugging

in some reduced revenue and increased expense figures.

While the system

was expecting about 550 more students this year than enrolled last year,

what it got was almost half again as many, 758 new students.

State funding

for Fayette's schools is being increased partly to help fund the new students,

though about $429,000 of the state increase is earmarked for computers

funded by the state's education lottery.

Refinancing

the system's debts to take advantage of current interest rates recently

saved the board some money, but on the other side of that ledger, Stephens

said this year's revenues will be about $250,000 lighter due to falling

interest rates on investments.

But the midyear

changes are fairly routine, Stephens said.

Not so routine

will be dealing with next year's budget in light of the faltering economy

of the last year and a half, he said.

"There

is a lot of prospect that growth will not be very great in the state dollars

next year," he said. "They may find ways to come up with the

money. The economy is better in recent weeks than in the last year and

a half."

State officials

estimate that Fayette will get a $1.7 million increase in Quality Basic

Education funding for 2003, Stehens said, but added, "I don't believe

that number."

"And even

if we get it," said schools Superintendent John DeCotis, "we

will still be behind the eight ball because of the growth."

Stephens said

if trends hold, the board's choices will be to reduce funding for teachers

and materials, to reduce the system's reserve funds or to increase taxes.

At this point, the growth in the local tax digest also is a wild card,

said DeCotis.

"We've

reduced the millage the last couple of years, so there is a vent there

if you have to do that," said Stephens.

The reserve

fund is almost $14 million, but Stephens said that's a good $5 million

below what experts recommend. "You ought to be able to go through

the year without borrowing," he said, adding that Fayette's system

still has to go into debt to weather the lean weeks just before property

taxes start to roll in.

But if the

board feels the situation requires going into the reserve, he is happy

that at least the midyear adjustments didn't already erode the fund.

"I'm pleased

we didn't have to go into the reserve in carrying out the midyear review,"

he said.