Island selectmen who traveled to Boston last weekend may have learned firsthand how bad the state budget crisis has become, but they still have no idea just how deep the cuts in state aid to their towns will be.

Cuts are surely coming, and the six Island towns will all feel the pain to some degree, according to state and Island leaders watching the budget process unfold.

"You can forget the use of the word, possible. It's inevitable. There will be cuts this year," said Cape and Islands state Sen. Robert O'Leary in a telephone interview with the Gazette on Wednesday.

This week, the state House of Representatives handed Gov. Mitt Romney authority to slash local aid between now and June. Cities and towns can expect $200 million less state funding in this period, but that will hardly solve the fiscal mess in Boston.

Lawmakers, grappling with an anticipated budget gap of up to $3 billion for next year, will spend the next six months trying to balance the bottom line in time for the 2004 fiscal year which begins July 1.

Towns on the Cape and Islands, while not nearly as dependent on state aid as larger cities, will still feel the brunt next year, according to Sen. O'Leary. Schools could be particularly hard hit, said the senator, even though Governor Romney is vowing to keep school aid cuts to a minimum.

Still, selectmen who attended last weekend's conference of the Massachusetts Municipal Association came away with a gloomy forecast and the distinct message that there's no way to sidestep the tough economic times that lie ahead.

"The level of emotion and anxiety was at the highest level I'd seen in a very long time," said Tisbury selectman Ray LaPorte.

"Friday night we had a dinner with [House speaker Thomas] Finneran, and it was gloom and doom. You wanted to pull the covers over your ears," said Oak Bluffs selectman Roger Wey. "It's just going to be some real difficult times, and it's going to hit everybody."

For Oak Bluffs, a town that struggles each year to make budgetary ends meet, the siphoning of state funds will just make a bad situation worse, according to Mr. Wey.

"This is a real concern. We count every penny, every year in Oak Bluffs and search to balance our budget," he said. "And we have dramatic increases every year in fixed costs like insurance. Now we're being cut by the state."

The one fact that could soften the blow is that many towns on the Island enjoy a healthy cushion of cash reserves, both in the form of money left over from previous year tax revenues - known as free cash - and separate stabilization funds that towns have built up for so-called rainy days.

Now, with a storm brewing, this could well be the time that towns must dip into such coffers to weather the cuts coming from Boston.

"Tisbury will be better off than many towns because we have a healthy tax base and cash reserves, and we are frugal," said Mr. LaPorte. While many city leaders are already saying that state aid cuts will lead to layoffs, the Tisbury selectman predicted that his town can avoid cutting services and personnel.

In West Tisbury, treasurer Cynthia Mitchell reported that the town's reserves are also in good shape. The stabilization accounts stands at $380,000, and the free cash reserve is just under $260,000.

Last year, state aid accounted for only eight per cent of the town budget of $8.6 million, according to Mrs. Mitchell. "If we're only getting eight per cent of the budget, it's not hugely significant," she said.

Still, Senator O'Leary and some other Island leaders are worried about pressure from state legislators who represent cities that rely on state money to fund nearly three-quarters of their budgets. Such politicians are already pressing for deeper cuts to towns that enjoy healthy cash accounts.

"The governor and the state might punish towns because they have cash reserves," said Mr. LaPorte.

Senator O'Leary promised to fight such efforts, but it's unclear just how the budget wrangling and fights over access to a dwindling pot of revenue will play out.

In yesterday's Boston Globe, Governor Romney indicated that he would try to preserve school aid in the midst of cost-cutting, but school leaders here are bracing for bad times, especially among the two school regions that have come to count heavily on state funding.

The state has alredy told Island schools that it won't help pay costs for the last quarter of the year incurred by Vineyard special needs students placed in residential schools on the mainland. That's a hit of roughly $100,000 for the schools this year alone, said Vineyard schools superintendent Dr. Kriner Cash.

He said he could easily see cuts next year totaling upwards of a half million dollars. "The question is how we manage it so we don't have to get into personnel and affect class sizes," he said. "We might be able to offset some through atttrition."

Both Mr. Cash and regional high school principal Peg Regan said the hard economic climate couldn't have arrived at a worse time. The high school is in the midst of a reaccreditation process, and schools across the state are under pressure to meet new standards set by state and the federal governments.

"There are unprecedented mandates for education, and they're more and more hollow when they're unfunded like this," said Mr. Cash. "Right now with these cuts coming, they're trying to cut our legs out."