State House and Senate leaders will likely turn to the state's Hurricane Relief Fund to eliminate teacher furloughs after budget negotiators agreed last night to remove furlough money from the state budget draft.

Lawmakers said they intend to set money aside to end teacher furloughs before they adjourn session next week. But they again called on Gov. Linda Lingle, the state Board of Education and the Hawaii State Teachers Association to reach a deal to make use of the money and restore classroom instruction days.

The state has about $180 million in the Hurricane Relief Fund, but lawmakers have not decided on the exact amount to commit to furloughs.

"We want to make sure that the community knows we are in support of the parties reaching a settlement, and we are committed to finding the funds to pay for it,"said state Rep. Marcus Oshiro, D-39th (Wahiawā), the lead House budget negotiator.

"We're still waiting and hoping that there's going to be some resolution," said state Sen. Donna Mercado Kim, D-14th (Hālawa, Moanalua, Kamehameha Heights), the lead Senate budget negotiator. "But, if not, then we're going to have to decide how much we're going to identify in the Hurricane Relief Fund, and that number is still being tossed around."

By stripping teacher furlough money out of the state budget draft, negotiators freed up millions in general-fund money that can be used to spare the state Department of Education from more substantial budget cuts.

Budget negotiators agreed to about $142 million in cuts to the department next fiscal year, roughly the same amount Lingle recommended in her budget draft last December. But both the House and Senate had proposed making deeper cuts than the governor suggested, so educators described the agreement last night as a minor miracle given the state's budget deficit.

The budget draft, which still requires final approval by the full House and Senate, would send an additional $22 million to the department's weighted student formula, which bases school spending on student need rather than enrollment.

Educators had feared that proposed cuts to the weighted student formula — the House had wanted to reduce it by $18 million — would lead to larger class sizes.

EDUCATION CUTS

The extra money for the weighted student formula will come in part from cuts to education programs that the department reluctantly identified for potential elimination. One popular program that survived, however, was boarding for students at Lahainaluna High School on Maui.

"We are very pleased with the budget that we received," said James Brese, chief financial officer at the Department of Education, adding that lawmakers closely followed recommendations from the state school board.

"It honors the board for the work that they have done."

Educators believe that the extra money for the weighted student formula will help the department with its goal of encouraging more school-level decisions. The weighted student formula was a main component of the education reform package adopted by lawmakers in 2004.

"We really believe that the schools should have a say, and the principals should have a say, on their funding and their programs," Kim said.

Budget negotiators also agreed to a $7.5 million cut to the University of Hawai'i, down from the $10 million proposed in the House draft.

Oshiro said lawmakers wanted to protect education, health and social services as much as possible as they try to close a $1.2 billion deficit through June 2011.

Negotiators are close to finishing work on the final budget draft, which will enable lawmakers to complete talks on other spending bills before the deadline tomorrow to have bills ready for final votes next week.

While the teacher furlough issue may not be resolved by the time session adjourns, lawmakers did not want to break for the year without devoting money to finance an agreement.

Four furlough days remain this school year and 17 furloughs are scheduled for next school year to help with the deficit.

State Senate Majority Leader Gary Hooser, D-7th (Kaua'i, Ni'ihau), said that lawmakers, including many facing re-election, do not have the option of doing nothing. "I don't think that's an option at all," he said.