Declining enrollment, state budget cuts and rising costs will combine to give the South Whidbey School District a projected financial shortfall.

How the district deals with the problem — what programs will be cut, which staffers will be fired, how many buildings will be closed — will be the reigning focus for all concerned and is likely to provide a continuous thread of headlines in 2009.

First up, the series of budget decisions at the state level from the governor and Legislature to be made by late February. Already, the governor has slashed $220,000 of state funding and more cuts are expected.

“Things are a little muddy now, but we’re guessing a $1.2 million reduction in the budget,” said district business manager Dan Poolman.

The arithmetic is brutally simple: From September 2008 to June 2009, officials project a total of 1,759, or 48 fewer children in local classrooms.

Because the state provides $5,382 per full-time student, the district expects a drop in revenue of $258,000 next year.

But by the year 2010, that projected enrollment will drop by another 112 students for a net loss of $603,000.