The Iowa City School District will need to use the majority of its reserve money to cover the roughly $5.6 million in cuts it faces after recent statewide budget reductions.

The slash comes after Gov. Chet Culver announced a 10 percent across-the-board cut statewide last week.

With the district using most of its $6.7 million in savings to comply with Culver’s cuts, officials said they will likely need to borrow money to offset operating and staffing costs from the district’s general fund, said Paul Bobek, the executive director of administrative services.

The district can borrow from other funds, such as the sales-tax fund, he said. Officials are unsure of the logistics, such as when the state will start withholding money and how much the district needs to borrow.

Other districts in Iowa facing similar cuts will also likely borrow money, said Assistant Superintendent Jim Behle.

“We’re very deeply concerned about the 2010-2011 school year,” he said.

Though district officials have the means to tackle immediate budget concerns, they are unsure how to fund the following school year, Behle said.

The state allocated the Iowa City School District a smaller increase in spending authority for next year than it usually receives — 2 percent compared with the traditional 4 percent.

And the district could receive even less than a 2 percent increase based on changing economic conditions, Behle said.

Spending authority is permission from the state regarding how much districts can spend. The state controls spending authority to help ensure communities that receive less tax money have the same opportunities as those receiving more, said Mike Cooper, a School Board member.

This change in spending authority means officials will have less freedom to raise property taxes, if necessary, he said.

Property taxes are one of three sources of income for the district, along with state funding and federal funding.

“We’ve got to figure out a way to spend less money,” Cooper said.

School Board members intend to discuss the budget cut at their meeting at 7 p.m. Tuesday, when Bobek is set to present an updated budget analysis and some projections, said School Board member Toni Cilek.

Board members and administrators plan to outline a process for addressing the cuts, she said, and they may also start making a tentative schedule of actions they need to take.

“We’ve got to be ready to move,” she said.