Gov. Mitch Daniels says Indiana will start cutting school funding starting in January.

Daniels previously announced the K-12 cuts of about $300 million. Schools will lose about 3.5 percent of current state funding in 2010, starting with their January payment. The State Board of Education had recommended that the cuts begin in January.

State Superintendent Tony Bennett says school districts can find 3 percent savings without laying off teachers.

Daniels says education is such a big part of the state budget that cuts were unavoidable to ensure Indiana doesn't have a deficit when the budget ends in July 2011. The Republican governor has already ordered cuts at state agencies and universities.