A rural Tracy school district must cut $500,000 to stay within its budget, but its superintendent fears bigger cuts in the future.

New Jerusalem School District superintendent David Thoming said roughly half a million dollars will be cut from its $6,461,840 budget in fiscal year 2010-11, but things will likely get much worse after Gov. Schwarzenegger delivers a January financial update.

In addition to that, schools statewide have had to make do with 75 percent of their revenue, as the state is postponing a quarter of its payment to districts across California until July. This means New Jerusalem has had to dip into its $1.4 million reserve to be able to pay its employees.

The goal for districts is to be financially sound three years in advance. While New Jerusalem should have a reserve in three years of about $550,000, Thoming said, more cuts after January could jeopardize that.

“What scares me is if they did this to us this year, what’s next year going to look like?” Thoming said. “We have a lot of very intelligent people that work with us and are really good at making it work for the sake of the kids, because we’re not going to sleep at night until we figure out what can make it work within the parameters that the state has set.”

In a worst-case scenario, the 764-student district’s revenue would probably take a 20 percent hit, something that made Thoming angry to think about. As the budget situation stands now, he said the cuts would mean being more lax with cleaning classrooms or other things that wouldn’t harm education.

Though New Jerusalem is in better shape than most school districts, Thoming said he empathizes with his fellow superintendents. He’s scared that more cuts will be on tap next year and said he was unsure what schools can do to fight back as the state gives schools less money but places more restrictions on how it can be spent.

“It’s unfortunate that no one on the state has been working on that,” Thoming said. “It seems like they’re more worried about their partisan politics and arguing back and forth than they are about fixing the problem.”

At a board of trustees meeting Tuesday night, Thoming and the board members brainstormed ways to save money or boost revenue, such as participating in the U.S. Department of Education’s “Race to the Top” competition, or installing solar panels on the schools’ roofs.

Thoming described the competition as the government trading extra money for control over how it’s spent, as it would offer cash to states that adopt federal educational policy and evaluation changes.

He told the trustees that enrolling in “Race to the Top” would mean long-lasting restrictions on spending for a one-time increase of $15 to $20 per student. New Jerusalem takes in about $5,000 per student from the state.

Thoming said enrolling three Delta Charter High School students would equal about whatever New Jerusalem would gain from “Race to the Top.”

He added that solar panels would likely be costly to install and would take up to 15 years for the district to break even on the deal.

Contact Tracy Press reporter Justin Lafferty at 830-4269 or jlafferty@tracypress.com.