Education Minister Dave Hancock, seen in April, warned Alberta school boards to brace for more budget cuts next year. (CBC)

The Alberta government is cutting this year's education budget by $80 million and warning school boards to brace for bigger reductions next year.

Education Minister Dave Hancock outlined details of the cost-cutting measures in a conference call Thursday, asking the province's 62 school boards to cut one per cent from their 2009-10 budgets.

He said $56 million would be cut from school boards and the rest from reductions in the provincial department.

A government fuel subsidy introduced four years ago to help cover high gas prices will end immediately.

School boards are also being told to give up about 11 per cent of a $400-million surplus they've accumulated recently.

Hancock warned the boards to be ready for major budget cuts next year.

The news comes one day after the province announced a record $6.9-billion deficit.

Worries about job cuts

Both the teachers' union and the Alberta School Boards Association are worried about what's on the horizon and how cuts will negatively affect both students and staff.

Carol Henderson, president of the Alberta Teachers Association (ATA), said major cuts would almost certainly mean younger teachers will be the first to lose their positions.

'Where's the money coming from? I don't know.'—Jenny Regal, Calgary Public Teachers' Association

"We want our young teachers, they revive the profession, they're going to be there when we have a lot of teachers retiring," she said. "So it would be unhealthy for the teaching profession to lose a lot of beginning teachers."

Jenny Regal, president of the public Calgary local of the ATA, said part of the frustration is not knowing where the cuts will happen. She pointed out the Calgary public school board dipped into its reserve fund this year to balance its budget and maintain badly needed ESL and special education programs.

"So where's the money to cut from there? Where's the money to cut from teachers where there's a class size initiative that's supposed to guarantee the number of teachers in a school based on the number of kids that are in the system?

"I would hope that the money's not going to come from the collective agreement that the government signed with the Alberta Teachers' Association in 2007. So where's the money coming from? I don't know. "

Disagreement over teachers' pay raises

On Thursday, Hancock also announced the province's teachers will be getting a raise of 4.82 per cent — and not the 5.99 per cent to which the ATA believes they're entitled.

The five-year collective agreement between the province and the union, negotiated in 2007, pegs pay raises to an earnings index compiled by Statistics Canada.

The Alberta Average Weekly Earnings index showed a raise of 4.82 per cent in January. But on March 31, Statistics Canada changed the method of calculating the index — which resulted in the yearly salary increase coming in at 5.99 per cent.

But Hancock said he's sticking with the original amount.

"That adjustment should be calculated on the basis that was in place at the time the agreement was signed which would result in the 4.82 per cent that everybody knew about and was cognizant about at the end of last year and into the beginning of this year," he said.

Hancock admitted the issue could end up in a legal challenge, despite ongoing meetings involving the government, teachers' union, school boards and Statistics Canada.

Earlier this week, an ATA spokesman told CBC News that teachers will go to arbitration if necessary to hold the government to the higher figure.

With files from John Archer, Des Kilfoil and The Canadian Press