The financially strained Roanoke School Board took drastic steps last year -- by outsourcing transportation, closing schools and revamping attendance boundaries -- to make ends meet when it crafted this year's budget.

But it seems the belt may not have been tightened enough. Deputy Superintendent Curt Baker told the board Tuesday night that the division may face a shortfall of more than $5 million this year. More than $2.5 million in local funds likely will not come to the division because the city's revenue projections are running significantly below forecast.

And just like school officials have predicted for months, that is not the worst of it. Based on outgoing Gov. Tim Kaine's proposed budget, school officials estimate that state aid will be reduced by about $8 million next fiscal year.

Governor-elect Bob McDonnell said Tuesday he won't replace Kaine's budget with his own, even though he has serious differences with it. New governors routinely revise their predecessors' budgets, even when the same party remains in power.

Although the picture is not pretty, Tuesday's announcement from McDonnell ends the waiting game by giving the city school board a starting point to begin budgeting for the next fiscal year. But after last year's outsourcing of transportation and the permanent closing of two schools, school board Chairman David Carson said he wonders what is left to cut.

Baker said even deeper cost-cutting initiatives earned reprieves late in the budget-drafting process last year with the promise of federal recovery funds. The $4.4 million funneled through the state's fiscal stabilization fund will not be available this year.

"You may be wondering, is there a prospect of a recurrence of some sort of Mighty-Mouse-here-I-am-to-save-the-day something to offset that," Baker said to the board.

There is the potential for $75 billion in federal aid from the Troubled Asset Relief Program. The House passed the Jobs For Main Street Act in December and Baker said the Senate is expected to consider it next month. About one-third of the funds will be used to stabilize public service jobs, and the act includes $23 billion to fund some 250,000 education jobs for the next two years.

In a letter to school system employees Monday, Superintendent Rita Bishop said difficult decisions will have to be made, but school officials have stopped short of saying layoffs may be looming.

The Associated Press contributed to this report.