RALEIGH - Wake County's student growth is again slowing faster than expected, potentially reducing the schools' budget by millions of dollars and shrinking the size of the next bond referendum.

School administrators project the district will grow by 5,245 students this fall, down from the official projection of 6,441 new students. If the difference of 1,196 holds, county commissioners could withhold $2.6 million from the school district.

"We knew the growth had to slow down eventually," said Rosa Gill, chairwoman of the school board. "But we still have to deal with growth."

Under the new projections, Wake would have 139,247 students this fall. That could move Wake past school systems in San Diego and Montgomery County, Md., to become the 17th-largest district in the nation.

Wake has already moved past Charlotte-Mecklenburg schools to become the state's largest district. Until the 2007-08 school year, Wake had experienced several years of record-setting growth.

In 2006, demographers predicted Wake would grow by 8,014 students in the 2007-08 school year and by 7,949 this fall.

But the school district grew by only 5,930 students this past fall, nearly 2,100 fewer than projected. School officials blamed the shortfall on the worsening economy bringing fewer new people into the county.

Complaints about the shortfall led commissioners last month to withhold $3 million from the school system to see whether enrollment met projections.

County officials were surprised to learn that school administrators had lowered this fall's projections by 1,196 students.

"What happened to change their numbers in the past few weeks?" said Joe Bryan, chairman of the Board of Commissioners.

Melanie Wilson, Wake County's planning director, said her office didn't learn of the revised projections until meeting late last month with Chuck Dulaney, assistant superintendent for growth and planning. Wilson said Dulaney told them school officials expected fewer children to enter kindergarten and high school this fall. Wilson said her office stands by the projection both groups agreed to last fall.

Dawn Graff, a co-founder of Wake CARES, a parent group suing Wake over year-round schools, asks whether projections were deliberately inflated to justify the conversion of schools to a year-round calendar. "If they were so far off last year, you think they could have done it right this year," Graff said.

The district receives money based on the number of students. The school board based the budget on 140,443 students. At $2,197 a student, a difference of 1,196 students would mean a potential loss of $2.6 million out of the $3 million commissioners withheld last month. Wake also could lose state funding it had anticipated.

The lower projections also could affect new long-range projections revised each fall by school and county planners. Those projections could be the basis of a school construction bond issue that school administrators have talked about putting on a spring ballot.

Gill said she'll want to discuss growth assumptions at a joint meeting of the school board and commissioners July 21.