The financial picture for North Carolina schools is bleaker now than during the worst of the recession.

In the past two years, the federal government stepped in with hundreds of millions of dollars that prevented layoffs of teachers, administrators, clerical workers and custodians at North Carolina public schools. As of last month, federal stimulus money had saved or created 17,409 education jobs in North Carolina, according to the state Department of Public Instruction.

But that money is vanishing, and school districts will have to look to Raleigh instead of Washington. And that will mean cuts.

Gov. Bev Perdue last week proposed a 3.9 percent reduction to public schools that spared cuts to classroom teachers and assistants. But it recommended trimming several thousand noninstructional positions, including administrators, office workers, janitors and bus drivers. Republicans who control the legislature have balked at Perdue's plan to hang on to a temporary sales tax; they suggest deeper reductions that could hit the classroom harder.

So education leaders now must consider life after the stimulus. They call it "falling off the cliff."

It's impossible to know how severe cuts would have been without the infusion of federal dollars in the past two years, said Philip Price, DPI's chief financial officer. Some of the stimulus money went to replace the cut of noninstructional school employees.

"The school districts were able to not have to take the severe cuts it looks like we'll have to take this year," Price said.

A financial freefall was delayed somewhat when Congress approved an additional $10 billion last summer for an Education Jobs Fund. That pot of money, which included $298 million for North Carolina, is in use this year and can be carried into next year, Price said.

In the Chapel Hill-Carrboro school district, stimulus money was spent for an auditorium addition to Carrboro High School, for technology, and for teachers to keep class sizes down, said Todd LoFrese, assistant superintendent for support services.

"Whenever we can lower class size ratios and improve services, we want to do it," LoFrese said.

At the very time when school districts are bracing for state budget cuts, they also are benefiting from a brand new stream of money.

North Carolina is just starting to receive the $400 million from the federal Race to the Top grant competition, which aims to spur innovation in schools. But that money is earmarked for specific projects, including tablet computers, technology infrastructure and professional training for teachers. It cannot be used to prevent layoffs or supplement operational budgets.

So even though Perdue's budget seeks to avoid touching the classroom, there may be no way around it. As the stimulus money dwindles and costs climb, there will be fewer and fewer places to cut, school officials said.

"I think it would be naive for us to say we can protect all teaching positions," LoFrese said.

The loss of federal money, combined with state and local cuts, will have a negative effect on schools, said Ed Croom, superintendent of the Johnston County schools.

"Additional reductions will diminish the quality of instruction our children receive," he said in a statement, "and this will have a detrimental impact on the economic future of North Carolina."

jane.stancill@newsobserver.com or 919-829-4559