ROTA, CNMI (Marianas Variety): June 30, 2003 - Students from Chuuk will experience more overcrowding in classrooms when classes resume in August as the state government plans to lay off several teachers and other workers due to the U.S. government's decision to reduce funding for the Federated States of Micronesia.

John D. Nakamura, an official of the Chuuk State School System, said they have no choice but to reduce the number of their teachers because they have no money to pay them.

"We are now in the process of downsizing our teachers and central office staff because of money problems. The Compact money that we're going to receive from the federal government is not enough to accommodate the number of personnel that we have right now," Nakamura said.

Under Compact II, the federal government will provide $72 million annually to the FSM's four states - Chuuk, Pohnpei, Kosrae and Yap.

The FSM will receive grant payments for a period of 20 years and it must be spent on health, education, infrastructure, public sector capacity building, private sector development, and the environment.

Nakamura said the new grant levels will bring immediate and serious adverse economic consequences to the FSM.

He said the situation is especially difficult for Chuuk which has no established industries that could cushion the impact of reduced aid from the U.S. government.

Chuuk has 100 schools scattered on its islets - 13 junior and high schools and 87 elementary schools. The state's student population is 18,000.

According to Nakamura, the student-teacher ratio during school year 2002-2003 went as high as 1:50 in some areas.

Once the retrenchment is carried out, they expect the ratio to be even higher, Nakamura said, adding that some schools will be closed to save on maintenance costs.

He said they are also facing problems in securing school materials, particularly textbooks.