The first tremors of what could be coming when Gov. Scott Walker releases his 2011-'13 budget proposal next week are rippling through Wisconsin school districts, where officials are preparing for the worst possibilities and girding for fiscal fallouts.

"I'm completely nervous," Cudahy School District Superintendent Jim Heiden said. "Walking into buildings and seeing teachers break into tears when they see you - I mean, that's the level of anxiety that's out there."

For the past two weeks, protests in Madison have been the focus of a nation, as angry public-sector workers have descended on the Capitol to try to stop Walker's proposal to roll back most of their collective bargaining rights, leaving them with the ability to negotiate only limited wage increases.

Next week, the demonstrations could move to many of the state's 425 school districts, the first local entities that will have to hash out budgets for a fiscal year that starts July 1.

School officials already are anticipating significant funding cuts that could endanger jobs and programs. The Wisconsin Association of School Boards and other education groups have cautioned that Walker's budget proposal could decrease the state's general aid to schools by $900 million over the next two years and lower the amount of revenue that districts can collect by up to $500 per student.

"If this were the case, when this comes out, it is unprecedented," said John Johnson, communications director for the state Department of Public Instruction. "And I think what you're seeing from school boards in terms of layoff notifications is unprecedented."

School administrators throughout the state have been issuing preliminary layoff notices this week to enough staff to protect themselves for whatever cuts to state aid and reductions in state-imposed revenue limits the governor and Legislature may have in store.

School officials have been advised to issue such notices by Monday, the day before the governor is scheduled to release his proposal for the next biennial budget, to meet the statutory deadline for nonrenewal of teacher contracts. That's because, if the Legislature approves the governor's budget-repair bill with the measures that would eliminate most parts of the school collective bargaining law, the layoff provisions and later deadlines that exist in many contracts might be wiped out.

Several school districts have taken the extraordinary step of issuing preliminary layoff notices to their entire unionized teaching force. That includes the Hustisford School District in Dodge County, where Lisa Fitzgerald, the wife of state Senate Majority Leader Scott Fitzgerald, is a guidance counselor.

"It's not something I take lightly," said Scott Fitzgerald, who supports the governor's budget-repair bill and rollback of collective bargaining rights for public-sector workers. "It will have an effect on our life."

Wait and see

Given the surprise Walker caused when he released the budget-repair bill two weeks ago, school officials said they need to prepare for any possibility from the new governor in his upcoming two-year budget.

In the Merton School District, where the board approved preliminary layoff and time-reduction notices for about one-third of the teaching staff, Superintendent Mark Flynn said the notices are meant to give the district cushion to make potential staffing changes in the 2011-'12 school year.

"I don't think we will lay off or reduce in time anywhere near that number (of teachers), but we really have to wait and see what's coming out of Madison," he said. "What's come out of Madison we didn't expect so far either. So who knows what's going to happen."

Neither Walker nor his staff have revealed much about what the 2011-'13 budget will include. But the governor has repeatedly said that his proposal to have public-sector employees pay about 5.8% of their pension contributions and 12% of health care costs is aimed at avoiding layoffs throughout the state.

On Wednesday, he estimated school districts would be able to save $976 million over the next two years with his plan. Spokesman Cullen Werwie said that estimate was based on school districts paying 4.2% less toward health insurance premiums and 5.8% less toward pensions based on 2009 salary data from the Wisconsin Retirement System.

Effect on MPS

That would not be available to districts like Milwaukee Public Schools, however, that have employee contracts in place already for the 2011-'12 school year that cannot be overridden by state law.

Everyone is in "wait and see" mode for the governor's budget, Milwaukee School Board President Michael Bonds said Thursday.

If Walker cuts close to a billion dollars in state aid for schools, he said, Milwaukee's share would be a reduction of about $200 million over two years, which would combine with a $100 million loss of federal stimulus money that's drying up at the end of this year and, potentially, a loss of about $80 million in Title I federal funds for low-income children.

In total, that could mean $300 to $400 million less in aid for the district, which Bonds said would be devastating.

Walker's office did not confirm Thursday whether the governor was seeking to refuse Title I funds, which provided $188 million to Wisconsin this school year to help educate low-income students in public and private schools. In an earlier interview with Journal Sentinel reporters, Walker indicated he needed to look into it.

Still, the undercurrent of stress in the state's largest school district has manifested itself in other ways.

At a regularly scheduled retirement briefing for principals hosted by the Administrators and Supervisors Council on Tuesday, Executive Director John Weigelt said the crowd that showed up was bigger than any briefing he'd held over the past 15 years.

Expressing concern

The majority of his members are frustrated and disappointed at the state of the district in general, he said, and the recent battle over health care and pension contributions just adds to the worries.

"The administration has given us several different figures as to per-pupil expenditure reductions, but we don't know what's accurate," Weigelt said. "I have high school principals tell me they could have class sizes in the 50s."

He added: "Everyone is frightened."

Cary Spivak of the Journal Sentinel staff contributed to this report from Madison.