Despite a state budget shortfall expected to reach at least $500 million, school officials and representatives from across New Mexico are still hoping legislators give additional funds to education.

Dozens of education officials and advocates filled the Capitol Rotunda on Wednesday to rally for more money and implementation of a new funding formula that could provide an extra $360 million for New Mexico schools.

"This isn't the time to pull back on making that request," Charles Bowyers, executive director of the National Education Association-New Mexico, told the crowd. "We're not willing to tolerate an insufficient funding system anymore."

The new funding formula is the result of a two-year-long study, completed by an independent contractor, that showed New Mexico schools have been underfunded by as much as 15 percent. Bowyers also pointed out school funding, as a percentage of the state's overall budget, has decreased over the last two decades.

For the 1990-91 school year, school funding represented 50 percent of the budget, Bowyers said. This school year, that amount is down to 43.3 percent.

Tom Sullivan, executive director of the New Mexico Coalition of School Administrators, said 21 districts qualified for emergency funding from the state last year. "For many, it's not an emergency. It's a chronic underfunding," he said.

Since the study findings were released last fall, education advocates have been pushing for use of the new formula. Despite approval from the state House last winter, a measure on the funding formula died in a Senate committee.

The biggest problem was where to get the additional money. Now advocates think they've found a solution.

Bud Mulcock, with the New Mexico Coalition of School Administrators, said a 1 percent increase in the state's gross receipts tax could raise between $470 million and $475 million.

He suggested money raised from a tax increase be dedicated to schools and not directed to the state's general fund. That would ensure the money goes to education and would also be a selling point to the public, he said.

That money, Mulcock said, not only would pay to implement the funding formula, but also would ensure no cuts are necessary for the following year. "It's a bold stroke," he said, "but I think it's a time for bold strokes."

Much of the rally crowd visited the Legislative Finance Committee meeting following the gathering, where they were told education is a priority, but that schools might have to sacrifice along with the rest of the state.

"We will do the best we can, and we're asking you to do the same," said Rep. Luciano "Lucky" Varela.

Whether the new formula is implemented will remain a question until the upcoming 60-day legislative session. Until then, school officials are bracing for what the shortfall might bring.

"We're of course starting to look at where we could make some cuts and stay away from classrooms," said Santa Fe Public Schools Superintendent Bobbie Gutierrez.

The first place to look, she said, is anywhere the district could outsource. That way the district could use money from mill levies or bond money to pay for services instead of using operating money. In the past, for example, the district has contracted custodial services for some schools.

Gutierrez said officials also will have to look at things like after-school programs, which she said cost the district $300,000 last year. Even supplies might be cut back, she said. "It means everyone will get a smaller piece of the pie."

In the end, though, the state will have to give more money to education, said Stan Rounds, superintendent of Las Cruces schools. Already, he said, class sizes in some districts are growing because officials are trying to fund other student needs.

"We've taken our belt and tightened it as far we can tighten it," Rounds said.

Contact John Sena at 986-3079 or jsena@sfnewmexican.com.