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Berkeley schools will take home a $700,000 windfall from Gov. Arnold Schwarzenegger’s education budget, district officials said Wednesday. 

“It was more than we expected, but certainly not a cure-all,” said Deputy Superintendent Eric Smith, adding that the district would still need to make further cuts to erase an estimated $2.4 million operating deficit and balance next year’s budget. 

Smith, who is working on a fiscal recovery plan to get the district out of the red and back in the good graces of the county office of education, declined to speculate on future cuts, but said that even if they balanced this year’s budget, additional cuts would be needed next year to offset rising labor and health care costs. 

Last year, facing a $6.5 million deficit, the district cut over 50 teaching positions, and increased class size for fourth, fifth and ninth graders. 

Superintendent Michele Lawrence said the district probably won’t need to temporally pink-slip hundreds of teachers this March—as they had the previous two years—but added this would “not be a year without pain.” 

Schwarzenegger announced his $59 billion education budget last week after striking a deal with education lobbyists to increase K-12 spending by $1.9 billion—$2 billion less than schools were scheduled to receive under Proposition 98, a ballot measure passed in 1988 that guaranteed public schools a large portion of the state budget.  

Aware that the state faced a $14 billion budget shortfall, however, Smith said he never counted on receiving an extra dime from Sacramento. “I was basically bracing myself for more mid-year cuts,” he said. 

Berkeley is hardly the big winner in the school budget equation. Just under one-third of all new funding is set aside to pay for enrollment growth—off limits to Berkeley, which has seen enrollment declines in recent years. 

On the positive side, Berkeley will be in line for new books after Schwarzenegger proposed restoring $188 million in instructional material cuts made last year by former Gov. Gray Davis. 

The budget is hardly set in stone. New funding would unravel if voters reject two March ballot initiatives authorizing a $14 billion state bond and requiring the state run balanced budgets and maintain cash reserves in future years. 

The legislature will also get a chance to weigh in, though Assemblymember Loni Hancock said she didn’t expect her colleagues to fight for more K-12 funding since education activists had already compromised with the governor. 

Schools will not be repaid the $2 billion lost this year, but Schwarzenegger’s budget proposes restoring education funding to levels mandated by Proposition 98 within a few years. 

Hancock, though, cautioned against those proclaiming education as the big winner in the budget shakedown, fearing schools would never get the money their still owed if Republicans didn’t yield on taxes. 

“We’re still talking about a $2 billion cut,” she said. “If people think this is only a deferral I’d say ‘dream on.’”  

Kevin Gordon, executive director of the California Association of School Business Officials, praised the compromise as necessary to protect education from legislators who would have wanted steeper cuts. 

“Considering the devastating cuts on the health and human services side, it would have been an impossible choice for a lot of Democrats in the legislature and some may have opted for fewer cuts on the other side and more to education,” he said. 

Berkeley could win slightly more control of its finances if the legislature approves the governor’s plan to hand over $2 billion in funding currently dedicated to 22 programs, mostly for bus service and teacher development. 

But Robert Manwaring, K-12 director for the nonpartisan Legislative Analyst’s Office, said such reforms often die as legislators fight to save their pet programs. “We’ve proposed this reform four or five times,” he said. “In that time period the number of programs went from about 20 to almost 100.