State Schools Superintendent Patricia Hamamoto is looking at cost-saving measures, including larger class sizes, hiring freezes, internal spending restrictions, contract cancellations and employee furloughs to offset $440 million in budget cuts through the next two years.

Hamamoto said yesterday the Department of Education is examining all options and their effects.

“;You may get the dollar value, but what are the consequences?”; she said. “;How will it play out at the school?”;

Hamamoto hopes to present proposals within two weeks to the Board of Education. Board members are scheduled to meet next Friday to discuss the cuts.

About $166 million of the cuts results from two years of $40 million in general fund reductions Gov. Linda Lingle ordered and two years of $43 million in cuts imposed by the state Legislature.

The remaining $274 million is the amount the governor figures would be the equivalent of savings from furloughs she has ordered at other state agencies. Lingle is trying to save $688 million through two fiscal years by furloughing workers, but she has no jurisdiction over 21,000 education employees.

The cuts to the department translate to a 13.8 percent reduction in payroll, effective July 1.

Hamamoto told the schools in a letter Tuesday that the department's revised budget would be based on preserving learning time for students; meeting all state, federal and board policies; ensuring the safety and welfare of students and employees; and focusing on programs and curriculum that support literacy.

Some education board members have indicated they want to look at other alternatives first before considering putting education workers on furlough.

Board member Herbert Watanabe said he is inclined to support cuts in vacation time, and paid days providing professional development for teachers.

Member Kim Coco Iwamoto said cuts might also be made in paid days allowing teachers to prepare for classes.

Iwamoto said she believes more revenues should be raised taxing luxury items for the rich, rather than cutting into the income of working people.

“;I personally don't support eating into the incomes of working-class people,”; she said.

Chairman Garrett Toguchi said while most of the anticipated federal economic stimulus money has been included in the state budget, he expects there will additional federal funds.

“;It's not going to solve the 14 percent, but some of it will add to it,”; Toguchi said.

State House Education Chairman Roy Takumi (D, Pearl City-Pacific Palisades) said $212 million in stimulus funds were used in the budget.