ALBANY –- The state’s education commissioner says there will be more pressure on school districts to more seriously merge and consolidate services as the gap is expected to steadily grow between district expenses and revenues, especially as a new property tax cap law kicks in this year.

"We’re very concerned about this," Commissioner John B. King told Senate and Assembly lawmakers this morning in the first hearing on the proposed 2012 budget by Gov. Andrew M. Cuomo.

King presented lawmakers with a projection -– “Impact of caps on local and state revenues for school districts” –- showing by 2016 overall revenues for 700 districts rising to $62 billion but overall costs expected to hit $80 billion.

Noting that school districts cannot legally file for bankruptcy protection, King said the pressure will be on to realign how districts staff their schools. He said districts will likely have to consolidate and merge some services, not just with their neighbors but possibly across the county in which they are located. King said officials also are concerned about what he called an "educational insolvency" by some districts unable to offer a full slate of classes to prepare students for college or the workplace.

King also said the state needs to reduce the number of state-imposed mandates on school districts. The commissioner said the Regents will be pushing a new round of mandate relief in special education services and other categories.

King, who was the first witness in the budget hearing process, also touched on the thorny issue of teacher evaluations. The governor has threatened to hold back school aid funding to those districts that are unable to enact new teacher evaluation systems.