NORTH ATTLEBORO - A shortfall in its special education budget is plaguing the school department for the second year in a row.

Superintendent Richard Smith advised the school committee Monday that he is projecting $714,000 shortfall in the special education budget - and that only a portion will likely be covered by shifting money around within the school department's budget. The school department could be forced to approach town meeting for up to $467,000 if the current figures stand.

"The special education budget is fluid and unpredictable," Smith said. "I see us reaching a point now where there is a very strong possibility we'll have to go back to town government to address the shortfall in the special education budget. If we were to build a budget to address any and all shortfalls, we would have to dismantle the school department to some degree and eliminate 15 positions."

Smith said it is difficult to project special education costs because circumstances change as students move in and out of the district. Seven students have been sent to new out-of-district placements this year, costing $345,000.

The school district has about 85 students that are sent to out-of-district placements, which cost about $2.3 million last year. Tuition increases have bumped that figure up by $315,000 this year. As an example, Smith said that one student is sent to a placement that cost $80,000 last year - which was split evenly between the school department and the Department of Social Services. The program received approval for a tuition cost increase from the state Department of Education and has doubled in price for this school year.

A final component of the shortfall is in contracted services for students who receive help within the district, which is expected to total $54,000. Smith said that figure is a reduction from last year, when the shortfall in that area was about $275,000.

Last year was the first time under Smith's tenure that the school department had to request additional money at town meeting to cover a shortfall. It is likely a similar approach will be needed this year.

However, Smith said the district is already working to chip away at the shortfall in-house.

The district has saved some money by creating programs to address needs of students previously sent to out-of-district placements.

A modest surplus has been generated by replacing the 40 teachers that left the district last year with individuals who collect lower salaries. Also, utilities and transportation bills are slightly lower than originally projected.

In order to protect the district from experiencing a similar shortfall next year, Smith has built in a 25 percent increase in out-of-district tuition costs in his budget proposal for the next fiscal year.