Hawai'i public school principals who have spent months preparing to absorb losses under a new funding formula now find themselves scrambling to figure out how to make the best use of some additional money.

All regular public schools will benefit from an extra $20 million allocated by state legislators to ease what had been shaping up as a crisis for many in the first year of a new budgeting process based on student need.

That's particularly good news to 140 of the state's 258 regular public schools that had expected to lose money and were planning cuts accordingly. At some schools the new budgeting process meant eliminating librarian and counseling positions and other support staff.

But the one-time funding from lawmakers will essentially make all those schools whole — and then some.

"We were in danger of losing our outreach counselor, so this is really important to have that back," said Jarrett Middle School vice principal Beverly Barnard. Her school goes from losing $69,800 to gaining $14,500. "And it will help us get our art teacher and music teacher back. ... It's just wonderful."

Although principals are relieved to learn they won't be losing money, they don't know when they'll get the extra money or what they'll do with it. Meanwhile, legislative architects of the new funding warn school administrators to be cautious about how they spend the money because the same amount may not be available next year.

That has some principals saying they don't plan to hire extra people for fear they'll just have to let them go in a year.

"We've got a one-year delay, but the cuts are going to catch up to me," said Richard Paul, principal of Hana High and Elementary School, which was slated to lose $94,000 but will instead gain $53,500.

"At this time I'm not inclined to spend the money to put people in positions because a year from now I'll have to send them packing," Paul said.

"We've worked on the plan and put everything in place, but then we get this big bonus, so now we have to go back in and look at our plan. So do you beef yourself up just to crash, or do you stay lean and use that funding not for personnel but for goods or services, knowing your personnel are going to be gone?"

As chairman of the House Education Committee, state Rep. Roy Takumi would approve that approach. As one of the architects of the extra $20 million to help schools through the first transitional year of the Weighted Student Formula, he said it's safer to invest in some important extras.

"They can keep the status quo as far as staffing," Takumi said, "and, secondly, can use these one-time dollars to meet some unmet needs like textbooks, computers, tutors and minor repairs and maintenance."

'RESERVE' POSITIONS

The situation for principals is aggravated by other uncertainties regarding staffing and funding that are common at this time of year.

The Department of Education has traditionally divided about 116 extra "reserve" positions among the districts for sudden enrollment increases or other emergencies; plus, under the Felix Consent Decree it has deployed around 1,000 extra teachers to improve the student-to-teacher ratio in classes where special education students are being mainstreamed.

While the reserve positions that went to 99 schools this school year will disappear because the money has been wrapped into the formula, the special ed teaching positions are outside the formula and will remain. But where they go will fluctuate, depending on school need, said Randy Moore, acting assistant superintendent for business services.

Such changes can be traumatic for schools such as tiny Maunaloa Elementary on Moloka'i, which has 2 1/2 extra positions this year even though it has just 55 students. Two of the extra positions were teachers allotted because of special education children, with a half position coming from district reserves.

Maunaloa principal Joe Yamamoto still expects his budget will go down, even though the Legislature's largesse means he'll gain $34,700 rather than losing $28,500 as he was expecting this coming year. And he has lost one person who left the island partly because the job was evaporating.

"People have to make decisions about sticking around or looking for other employment," Yamamoto said. "We tried to save as many personnel as possible. We had to cut way back on supplies to save the personnel we had."

With its small enrollment, the school should be allotted only two teachers, Yamamoto said. But with grades K-6, the minimum number of teachers they can operate with is four.

"I calculated that in four years there will just be a principal and four teachers. No office staff. No custodians. No educational assistants. No nothing," Yamamoto said. "I don't know how a school would be able to operate."

4-YEAR PHASE-IN

The budgeting changes are a result of the Reinventing Education Act of 2004 that mandated a new budgeting formula basing school allocations on student need, and giving principals control of how to spend about 70 percent of their lump sum budgets.

With some schools losing hundreds of thousands of dollars over a four-year phase-in, the outcry was so intense that the Department of Education created a second Committee on Weights, which is re-evaluating the formula. As well, the Board of Education restricted gains and losses for the coming year to just 10 percent of the total. The changes will be phased in over four years, with current plans calling for a 25 percent cap in the second year.

But with the new Committee on Weights back at the drawing board, legislators expect a new formula to emerge, one with a base allocation for each school, much like the one created by the Legislature this year.

While the $20 million will continue as an additional part of the DOE's lump sum budgeting each year, it may not be divided up this way again. That will be up to the new Committee on Weights.

With so much in flux, legislators also expect schools to continue to re-evaluate how to reconfigure their staff to get the best for students with the dollars available.

State Sen. Norman Sakamoto, chairman of the Education and Military Affairs Committee, said when the second phase of the Weighted Student Formula is implemented with the 2007-08 school year, schools will need to be especially creative.

"Many schools, when it goes to 25 percent, will start to end up in the red," Sakamoto said. "It won't be as many because the $20 million was added, but they need to think of how do they share, a librarian or even a principal."

Under the legislative formula, every school gained money, even those that gained funding under the new weighted formula budgeting. In particular, those with the largest enrollments had the biggest gains.

For the state's biggest high school, Farrington, the legislative tweaking will mean next year's funding gain amounts to $269,500 instead of $142,900.

But even here, there is caution.

"We don't know if it will continue, so I don't want to spend it on things that are permanent kinds of things," said principal Catherine Payne. "I think we can make it go further if we're using it for outreach rather than teaching positions. We want to build support for families in our community to get the kids to school.

"So maybe if we put our resources into that next year, we'll see results the following year."

Reach Beverly Creamer at bcreamer@honoluluadvertiser.com.