Michigan schools might face unexpected cuts in this year's state budget.

The state's House and Senate fiscal agencies' returns from 2006 tax receipts are about $130 million less than what was expected by lawmakers who created the 2007 budget.

The 2007 fiscal budget went into effect Oct. 1, but exact figures on revenues will not be calculated until December.

Nothing is final until the books on the 2006 fiscal year budget, which ended Sept. 30, close next month, state budget office spokesman Greg Bird said.

Bird said the incoming state Legislature — a Democratic House and Republican Senate — will need to deal with any problems that come up.

"In the last few years, we've run into instances when there has been less than anticipated," Bird said. "This is something we deal with when the economy is not as good as we hoped. If it is found we have less revenue than anticipated, we will then have to work with the Legislature to address that situation."

The School Aid Fund, which funds K-12 education and depends mostly on taxes for funding, is expected to be impacted more than the state's General Fund.

The state's 2007 budget — which includes federal and funds restricted for certain purposes — is about $42.4 billion.

Michigan's General Fund for the 2007 fiscal year is expected to receive about $9.2 billion and the state's School Aid Fund — used to fund education throughout the state — is expected to receive about $13.1 billion.

If there are cuts that need to be made, the state will need to process a request for the Legislature to look into the matter, said Mary Ann Cleary, associate director of the House Fiscal Agency. Lawmakers would have 30 days to decide if cuts will be made, or funding per student in the state automatically would be reduced to make up the difference, she said.

"Legislature could determine where those cuts come from, but they haven't done that in the past," Cleary said.

Legislators also could find ways to lessen the impact, but usually opt to take the rest from students, she said.

Although the School Aid Fund is receiving more funding than last year, every penny counts, said Jay Wortley, senior economist for the Senate Fiscal Agency.

The fund had $12.7 billion in the 2006 state budget.

"Schools have been planning and expecting a certain amount of money," he said. "That means they'll have to go in and revise their spending plans for 2007."