Following the release of the provincial budget Thursday, the education minister is being upfront with the challenges the education system will face in the coming months. An increase was provided in the education portfolio, but with a majority of the amount already spoken for, layoffs are a possibility.

This year's budget shows an increase of $4.5 billion for education, but a large chunk of that will be used to cover off an increase in teachers' salaries, which were previously promised.

"It's going to be a difficult thing for school boards to do given that the significant amount of their budgets goes to staff salaries and teachers. It's going to be difficult for them to maintain the number of teachers," said Education Minister Dave Hancock.

Both school boards say they are in the midst of some major number crunching. Edmonton Catholic Schools believes it is looking at a shortfall of $9.5 million, and Edmonton Public Schools predicts a $17 million deficit.

There are reserves funds school boards have access to, however, after last year's budget, school boards report much of those funds were used.

Edmonton Public's reserves are pegged at $34 million, but Edmonton Catholic says by the end of August of this year, a reserve fund of about $4 million will remain.

"We haven't squirrelled away anything major for a rainy day," said Catholic School Board chair Debbie Engel.

With those reserves, the education minister admits staff cuts are likely.

"It's going to be difficult for them to maintain the same number of teachers," Hancock.

And the mere thought of less staff returning to class in September isn't sitting well with some teachers.

"It would be hard, it would be somewhat heartbreaking," said Neil Carby. "It's going to dampen the spirits of teachers like myself right now."

Catholic School board officials say they have no choice since 80 per cent of the budget goes to salaries. Engel admits everything is being examined at this point.

"The impact will definitely be felt, there's no doubt about it."

With files from Jessica Earle