PORTLAND, Ore. -- New economic realities have forced Portland schools officials to reassess spending priorities for future budgets.

Schools officials said that after two years of relative stability, financial cuts were once again forecast.

The latest numbers presented to the school board this week offered mixed news: the district received $17 million in unexpected revenue in 2007-08 but faces a $22 million deficit in 2009-10.

Extra money came in to the district from an unexpected increase in state per-student funding, higher property tax revenues, delinquent income tax collections and strong interest earnings on investments, according to schools financial officials.

Superintendent Carol Smith proposed using the surplus money to protect against “drastic cuts,” such as closing school early or staff layoffs.

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But she said some positions may remain unfilled next year and that schools should prepare for cutbacks in services, spending and travel.

“We can weigh our priorities, make some strategic but perhaps painful reductions and set ourselves on a path to fiscal sustainability,” she said.

Smith said without cuts now the school would be left with “nothing in the bank to cover an uncertain future.”