School officials say they're dealing with the worst financial situation they've seen in years -- possibly decades -- as they prepare to chop millions from their budgets, lay off teachers, increase class sizes and cut salaries.

And unlike last year, when federal stimulus money helped buffer the blow, there is no financial cushion on the horizon.

"It's about as bad as I've seen in 40 years," says Larry Powell, Fresno County schools superintendent.

Marcus Johnson, Sanger Unified's superintendent, says he can sum up the budget situation in two words his students might utter: "It sucks."

In California, property-tax revenue is a major source of school funding, and it has plummeted with the decline in real estate values.

School officials say they don't know how the state budget will finally shake out, but they fear it will get worse.

So the cutting has begun.

Fresno Unified -- the Valley's largest school district, with about 73,000 students -- is looking at cutting $35 million out of its $990 million budget.

It will do so by increasing the size of K-3 and 9th-grade math and English classes, eliminating 181 of approximately 4,000 teaching positions and asking employees to take at least two furlough days. Across-the-board pay cuts also are likely.

Permanent teachers likely will not lose jobs, and nearly all of the cuts would occur through attrition and retirements, officials said. But some nonpermanent teachers likely will lose their jobs.

The cuts go deep in other districts as well: $28 million out of Clovis Unified's $280 million budget, $13 million out of Madera Unified's $170 million budget, and $10.5 million out of Central Unified's $140 million budget.

Central and Madera expect to lay off teachers and Clovis could ask employees to take a 2% pay cut. Visalia Unified already has released 37 temporary teachers and cut 30 administrative and support positions.

And Madera Unified -- which could cut up to 114 of about 1,000 positions -- is looking at closing Dixieland Elementary School.

Because salaries and benefits make up such a large part of school budgets, employees likely will be hit hard. Already, local school districts have delivered more than 340 notices to teachers and administrators that their jobs are on the line.

State law requires the notices, which are not considered formal layoff notices, be handed out by March 15. Classified employees -- generally considered support staff -- only require a 45-day layoff notice and still could receive them by the time districts finalize budgets in June.

John Arredondo, a physical education teacher at Washington Academic Middle School in Sanger, received notice Thursday that he could lose his job. He is a second-year teacher and still considered probationary; teachers don't achieve tenure until their third year.

In all, 116 Sanger employees received the notices, including 88 teachers.

Arredondo, his wife and three daughters -- ages 14, 11 and 8 -- just moved into a new home in Sanger. His wife works; if he loses his job, they can probably scrape by. He hopes to find substitute teaching stints in rural districts with difficulty attracting teachers.

Arredondo said he isn't bitter and understands the financial predicament facing Sanger Unified. "There was a lot of discussion leading up to it," he said.

"It's education, it's such a lion's share of the [state] budget and there's gonna be good times and bad times. But, you have a contract and you have to be a professional," he said.

Arredondo also hopes that planned talks between the Sanger teachers union and the district on a proposal to reduce salaries can save his and other teaching positions.