MIDDLETOWN — Early estimates peg the School Department’s budget increase for next year at just over $1 million, or 3.2 percent, over current-year spending.

A draft budget, reviewed at a School Committee workshop last night, calls for potentially laying off 16 teachers — including five at Gaudet Middle School and the district’s only English-as-a-second language instructor — and may require reductions to sports and activities to offset fiscal constraints.

The school district sent out preliminary layoff notices last Friday, according to schools Supt. Rosemarie K. Kraeger. The School Committee will vote on the layoffs at a special meeting on Feb. 25.

State law requires school boards to notify teachers by March 1 if there’s a possibility they will be laid off for the following school year.

The potential layoffs include three elementary teachers, three reading teachers, 3.7 positions at Middletown High School and the five positions at Gaudet.

Kraeger said she’s worried that the district may not be able to save an estimated $500,000 in salaries through the layoffs because any unexpected bumps in student enrollment would necessitate maintaining staff levels. Class sizes, she noted, are already at the maximum of 25 students in most classrooms. The proposed staff cuts, however, are being made in part because of projected declining student enrollment.

Kraeger said Middletown won’t have to issue pink slips to as many teachers as neighboring communities have, but the staff reductions are still significant for a district that, at this time last year, cut 15 positions.

Next year’s budget forecast is gloomy because of expected shortfalls in state and local aid, combined with the state’s 5-percent tax-levy cap, Kraeger said.

“I look at everything we spent so much time working so hard to get, like literacy teachers and our math coaches, and they’re being trimmed,” she told the school board. “Where are we going to go next year when we don’t have those positions to cut?”

Kraeger is basing her $33.9-million budget proposal on the assumption that the state will level-fund Middletown’s education aid, but she noted, “You talk to one camp and they say that’s firm, and you talk to another camp and they say don’t count on it.”

School board members said the district may have to reduce sports to make up any additional shortfalls. While state law prohibits school boards from charging students to play school sports, committee member Theresa M. Silveira Spengler suggested the board consider charging for sports-related transportation, which costs the school district about $68,000.

“I’m all for sports, but I don’t think it’s fair to cut a reading teacher and an elementary teacher,” Spengler said.

School administrators were able to reduce the budget proposal by reducing life insurance costs, vocational education tuitions and mentoring stipends for teachers, among other things. The budget also calls for reduction in the hours worked by library assistants, potentially eliminating afterschool library hours at the high school.

On the other hand, the budget calls for spending $70,000 on new textbooks district-wide and $10,000 for a new student testing system to help assess math achievement in grades 7 to 9.

The largest budget increase — 15 percent — was in the area of special education. But school officials noted that the increase is due in large part because of a reduction in federal Medicaid reimbursement.

Kraeger is also proposing an additional $78,000 for legal services related to arbitration and grievances, a doubling of the current-year budget for that line item, which is expected to run over budget.

“We’re worried this isn’t even enough,” Kraeger said.

The School Committee will adopt its budget proposal next month. Interim Town Administrator Shawn J. Brown must present his municipal spending plan to the Town Council by April 1.

Information on the schools’ budget proposal will be available on the School Department’s Web site, www.ri.net/Middletown

mwims@projo.com