BREWER – The situation in Augusta is making school leaders nervous, and it “gets worse with each passing hour,” Superintendent Daniel Lee informed the school board on Monday night.

Lee told the Brewer School Committee that Gov. John Baldacci’s supplemental budget contains “an adjustment” that would cut funds the school department now receives for disadvantaged children by approximately one-third.

“For us, this means a reduction of $138,000 in next year’s budget,” he said. “That’s pretty hard information.”

The governor’s planned cuts would reduce the state’s Essential Programs and Services allocation for economically disadvantaged students statewide by about $9 million, which also would mean large cuts for the communities of Bangor, Portland, Lewiston and others, Lee said.

The superintendent and business manager Lester Young get together every morning to see what has changed in Augusta.

“This is the first thing we talk about daily,” Lee said. “It’s looking worse every day.”

Lee said there are other issues in Augusta concerning how the state plans to meet requirements to fund schools at 55 percent. He said, “There is a lot of scuttlebutt out there on how this is going to be done.”

Until the state’s budget is final, “we’ll continue to monitor it and keep you informed,” Lee said.

In addition to projected drops in state budget funds, Brewer High School also expects a drop in tuition enrollment, Young told the board.

As of Jan. 22, there were 827 students at Brewer High School, 396 of whom were nonresident tuition students. Young is projecting that during the 2008-09 school year that number will drop to a total of 807 with only 357 tuition students.

“That’s down almost 70 students from what it was at last year,” he said, referring to the 890 students enrolled in April 2006. “The tuition students are critical to our budget.”

The projected decrease in tuition revenues for 2008-09 is around $44,000, Young said.

“Anytime your revenue goes down, it’s not a pretty picture,” he said. “It looks like we have some budget issues that we’re going to have to deal with.”

As the number of out-of-town students declines, services must drop, Lee said.

“We will have to figure out how to spend less money,” he said.

During the meeting, the board also:

. Was recognized by the Maine Committee for Employer Support of the Guard and Reserves for signing a statement of support for employees who are also members of the Maine National Guard or the U.S. Army Reserves.

. Recognized three former Brewer High School district trustees with clocks of appreciation for their service to the board and community. Honored were Frank Breau, Philip Griffin and Tom Gardner.

. Accepted with deep regret the resignation of Capri Street School and State Street School principal Joan Staffiere, who is retiring. The board decided to change the job duties of Washington Street School principal Janet McIntosh and Brewer Middle School Principal Bill Leithiser to cover their and Staffiere’s duties. The changes also require hiring an assistant principal for State Street School.

. Heard a report on the third-grade MEAs by Paula Moore, kindergarten through grade 12 literary consultant. Moore also told the board she has been giving teachers suggestions on how to improve this year’s scores.

. Approved a renewed services agreement with the Dedham School Department for central office and superintendent services for 2008-09, which would produce a revenue of $99,000.

. Changed March 14 from an in-service day to a regular school day to replace a snow day.