On holdbacks, Gov. Butch Otter said, "As you know, the tiered holdback that I ordered in September gets us only part of the way to addressing the projected shortfall in our Fiscal Year 2010 revenue. I am asking you today to approve that holdback and to bring your collective wisdom and experience to bear on the remaining shortfall." In his budget, he is proposing an additional $40 million, 1.6 percent holdback during the current budget year - one that would apply to public schools as well as all other agencies. That would mean a $27.9 million mid-year cut for schools. He also would tap $20 million from the state's budget reserves to balance this year's budget, making up for additional shortfalls as tax revenues have lagged.

On the new holdbacks, Otter said, "That is among the toughest recommendations I make today." He said, "Legislative leadership and I are in agreement that public schools must participate in this new effort to respond to sharp revenue reductions by paring an additional 1.6 percent from our spending for the remainder of Fiscal Year 2010. Our proposal would look to local school districts for their specific ideas on how to best achieve the savings, including their discretionary use of local reserve accounts and - in extreme cases - advance future state funding." He added, "This is not the course any of us would prefer to follow. It is unfortunate, but it is a temporary situation made necessary by our circumstances."

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