The Fairfax County School Board recommended Monday that teachers receive 1 percent raises to keep up with inflation and provide some relief from their pension payouts, but ruled out a larger salary increase for employees in light of a looming budget hole.

Those initial choices come as the school system faces a budget shortfall as large as $147.9 million, the biggest gap in the school board's memory. By counting out annual "step increases," the school system still would be staring down a $103 million hole, not including another $90 million in desired additional programs for the schools.

That $103 million gap could be closed with a 6 percent increase in funding in the fiscal 2013 budget, but the county has indicated such a transfer above its current $1.68 billion is unlikely. The school board also will explore cutting programs, travel expenses related to recruitment, nonschool-based staff and consultants.

A step increase for all school employees -- who did not receive raises three of the last four years -- would cost the system $43 million.

"Right now, I think its a little bit foolish to talk about raises given the scenario we're working with," said Patty Reed, the school board's Providence District representative.

Teachers won't be left in the dust, however. The school board is recommending that it pick up 1 percent more of employees' contribution to their retirement funds at a cost of $13.5 million, essentially creating a small raise over last year's paychecks. The board also directed Superintendent Jack Dale to consider a 1 percent cost-of-living adjustment, at a cost of $18.9 million.

One of the bigger ticket items for the school system, which won't be felt by employees, would be fully implementing the state's pension plan to the tune of $10.8 million. Employees would have to pay 3 percent more of their salaries into the Virginia Retirement System, but the school system would be required to compensate them an extra 3 percent, evening out the effect.

"What I'm hearing holistically from the board is they care very much about employee compensation and it's a priority, but they just don't know how much money they're going to have," said Steven Greenburg, president of the Fairfax County Federation of Teachers.

Dale and the school board are scheduled to meet with the county Board of Supervisors in November, with Dale expected to release his proposed budget in January.