Don Iglesias, superintendent of schools, told a group of more than 50 Rose Garden area residents attending a recent informational meeting at Hoover Middle School that the district is facing "a shortfall of $9 million in revenue" for next year's budget.

The solution the district has come up with is to close two elementary schools and one middle school, combined with the following cuts: eliminating sixth-period classes at middle schools; increasing class sizes in grades K through 2; eliminating four full-time positions in the district office; and implementing a central kitchen, as well as other measures.

Rosemarie Pottage, director of finance for SJUSD, pointed out that 98 percent of the district's budget is state funded.

"If the state is not doing well, we're not doing well," Pottage said.

The district used reserved funds to balance the 2004­05 budget, but, Pottage said, "That pushed the problem to 2005­06."

Since enrollment is the key factor in state funding, the district's decline of 1,500 students on the elementary level over the past five years is not good news. That decline is projected to continue.

Iglesias made a point that it is a fallacy that students are transferring to private schools. In fact, he says, enrollments are down as much as 20 percent in private schools, and most districts within Santa Clara County are also experiencing the same decline as San Jose.

"The birthrate is down and the cost of living is extreme here," Iglesias said. "We've seen a migration out of our area to areas with cheaper housing. We can't run with a deficit."

Iglesias said in spite of budget cuts, he and the district remain committed to student achievement, establishing a college-going culture for all students, securing financial stability for the district, keeping qualified personnel and making parents and the community an integral part of the process.

To balance the upcoming budget, SJUSD is proposing to close two elementary schools and one middle school. Schools that drop below 75 percent of their enrollment capacity are candidates for closure, according to Bob Gonzales, director of student assignments for the district.

Elementary schools under consideration, in addition to Cory and Trace, are Allen, Almaden, Bachrodt, Carson, Hacienda, Lowell and Randol. The middle schools under consideration are Castillero, John Muir and John Steinbeck. Closing one middle and two elementary schools will save the district $1.9 million.

Iglesias said the district is also looking closely at proposing a parcel tax, which, if passed, could restore cuts such as sixth period or class sizes.

Given the close proximity of Cory and Trace, Gonzales said it's "unlikely" that both schools would be closed.

Even if one of them closes, it will be a hit for the Rose Garden area, which lost Hester Elementary School this year in a budget-cutting move.

An additional informational meeting on the 2005­06 budget is set for Oct. 28 from 7 to 8:30 p.m. in the boardroom of SJUSD, 855 Lenzen Ave.

For updates or additional information, visit www.sjusd.k12.ca.us or call 408.535.6000.