Fluctuating tax digest numbers are continuing to cut away at an already bare Hall County Schools 2012 budget.

School officials now expect to draw in $3.4 million less from property taxes than in 2011, a $1.6 million greater deficit than what was anticipated just last week. That projection, coupled with $19 million in state funding losses, puts the district in a dire financial situation unlike any Deputy Superintendent Lee Lovett has seen in his 39 years balancing the budget.

“We’ve never had anything quite like this. It just keeps compounding,” Lovett told the Hall County Schools Board of Education Monday night. “And next year I think I will be able to say I’ve never had anything like this before because I think it’s going to be worse.”

Lovett proposed two options that either alone or in tandem could make up the shortfall.

The first would be to cut pay in a system that has already seen painful drops in paychecks. In 2009 the district approved a systemwide 2.4 percent pay cut and seven furlough days for this academic year. The district already plans to take eight furlough days next year.

The second option on the table would be to increase revenues by raising property taxes, Lovett told the board.

“We’ve never started a year in the red and I would hope that we will not start a year in the red next year,” he said. “But we are going to have to do some things to keep from being there.”

Superintendent Will Schofield said the district is expecting to end this year with a $12 million to $14 million surplus, which will help ease some of the blow. But he warned that difficult decisions are ahead for the school district.

“When people ask, ‘At this point do these cuts affect instruction and programming?’ we’re past that. Of course they do,” Schofield said. “So now it’s a balancing act of how deep can you cut and continue to provide the kind of services, the kind of education the boys and girls of Hall County have come to expect.”

Schofield said the board will continue to discuss the budget at its June 6 session.

Also at Monday’s meeting, the board approved the rehire of two teachers who were not offered contracts earlier this month for the next academic year. In early May, the district announced nearly 40 teachers, many in the English Language Learners program, would not be rehired. At the time, Schofield said he hoped to hire some of those teachers back once funding became more certain.