The largest single chunk of the cuts — $600,000 — will come from raising the maximum class size in K-3 to 22 children and, in grades 4 and 5, to 24 children.
The second-largest cut will come from reducing principals' discretionary funds from $105 per student to $70 per student, resulting in possible reductions in materials, printing, supplies and the hours of school aides.
The cuts to the principals' discretionary funds will be partly mitigated by extra contributions from Palo Alto Partners in Education, a parent-run educational foundation that recently presented a record-breaking $2.9 million to the district.
Board members expressed particular concern about the classroom consequences of the discretionary-fund cuts, with board member Barb Mitchell withholding her support for the whole package until more information about next year's finances becomes available.
"This cut is something particularly disruptive to school sites and puts us on a slippery slope," Mitchell said before the 4-1 vote approving the $3.8 million reduction package.
"I'd rather wait on this one until we have more information in May or June," she said.
But her colleagues disagreed.
"I think we're in an unprecedented economic situation in this country and actually in the world," board member Melissa Baten Caswell said.
"I don't know how long it's going to take to get out of it, but I'm not optimistic that things are going to look better in May or June. So it's important for us to give the school sites an ability to plan for next year," she said.
The cuts approved Tuesday did not include an earlier proposal to increase the size of ninth-grade English and math classes by one student. Instead, principals were given discretion to manage the budget cuts in the ways most effective for their sites.
Board members praised efforts already undertaken, such as an informal hiring freeze and winter closures of middle school pools, which have yielded significant savings.
They also stressed the critical need to secure an increase in the districts current $493-per-parcel tax to $589 per parcel. The measure will come before voters in May and requires a two-thirds majority to pass.
In addition to the cuts passed Tuesday and $2.7 million in surplus from past years, school leaders are banking on $1.8 million in the higher parcel-tax revenue to plug the district's $8.3 million "structural deficit" for 2010-11.
"These are trying times," board member Camille Townsend said. "This district has a history of budgeting conservatively. The parcel tax is critical.
"The additional $1.8 million is 18 teachers — this is really core to our program. We have to be very upfront and very clear about the reality of the challenges we are facing," she said.
Board members noted that Palo Alto is far luckier than many school districts in California, where class sizes will rise to 30 this fall.
Skelly thanked board members for approving the cuts, noting that he needs to move on to other pressing concerns such as replacing many top administrators who have announced their resignations, including the principals of both Gunn and Palo Alto high schools, Terman Middle School and Palo Verde Elementary School, as well as several top managers in the district office.