ALLENTOWN, Pa. -

During Thursday night's Finance Committee-of-the-Whole meeting, Allentown School District Chief Financial Officer Jack Clark told directors it is likely that the state will reject the district's special education exception request, thus capping the rate the district could potentially hike property taxes at roughly 6 percent.

With the rejection, the district will lose about $2.5 million in potential revenue, Clark said.

The district had sought to receive special exceptions from the Commonwealth of Pennsylvania to raise taxes by a potential total of 9 percent in three areas - school construction costs, increased retirement contributions, and special education expenses.

Superintendent C. Russell Mayo noted Thursday night the board had indicated previously that they would not support a 9 percent tax increase on property owners regardless of the administration's request.

Thursday's announcement still left much up in the air for the cash-strapped district.

On March 13th, Mayo proposed his plan to layoff 100 district employees, 74 of whom would come from the teaching ranks.

Another 29 instructors could also find themselves out of work if they can't be claimed under a newly proposed grant by Gov. Tom Corbett in his operating budget.

The district is facing a $13.2 million deficit that already includes a 3.2 percent tax increase on property owners.

A preliminary budget featuring a 9 percent tax increase and $6.1 million in budget cuts was approved by the board in January, although no one expects that to be adopted when a final budget is due to the state in June.

On Thursday night Mayo and Clark used charts and graphs to tell their tale of woe.

The one potential bright spot is a roughly $900,000 savings after an audit indicated some child nutrition funds could be diverted back to the district.

But the amount is a drop in the bucket.

The administrators made the case Thursday night the district's sorry financial state isn't a case of lousy management on their part, but rather a case of a dwindling source of state and federal revenues and a city that isn't capable of supplying the revenue they need to keep the district economically solvent.

The only real option the district has left to make ends meet, Clark and Mayo said, is to continue with austere budgetary practices that are centered around cutting spending even further and seeking revenue wherever they can find it.

"We've been looking under every rock and around every corner," Clark said Thursday night for ways to make ends meet.

The rock-and-corner strategy, however, is not capable of producing a balanced budget.

Clark chose to spend the majority of his time explaining to board members exactly why the district is broke.

The district spent $11,927 per pupil during the 2011-2012 year, according to data provided by the administration, the lowest amount in the Lehigh Valley, and also relies heavily on dwindling state aid.

"We don't have a lot of control over the revenue side," Mayo told directors. "That's why we talk about reducing the expenditures."

Local taxes comprised 31.7 percent of the district's total revenue in 2011-2012, which is by far and away the lowest amount in the region.

To put that number into perspective, the Saucon Valley School District received 80.8 percent of their revenue from taxpayers during that same year.