MONTGOMERY(AP) — State school officials say austere financial times are looming in the school year that begins Oct. 1, with the state education budget down sharply from what it was three years ago.

The upcoming fiscal year budget is $5.5 billion. That’s down by about $1.2 billion from the fiscal year that began Oct. 1 in 2007.

The state system’s assistant school superintendent for financial services, Craig Pouncey, said 35 of the state’s 132 school systems have had to borrow money to be able to pay salaries in September, the last month of the current budget year.

The problem was intensified last week when Gov. Bob Riley ordered across-the-board 2 percent cuts in school funding after BP declined to immediately pay a $148 million claim for state revenue lost because of the oil spill.