LYNN – Mayor Judith Flanagan Kennedy has finished the first draft of the budget, which asked each department to cut expenses by two percent.”Every department except the School Department,” she added, “because it has a level service budget.”Kennedy has been staying in her office for much of the last two weeks, but she said this particular draft, which she handed off to Comptroller Stephen Spencer Tuesday, is only the first draft.”He will look it over and put it into a loose leaf binder, and then I’ll go back over it and pencil in any other cuts or changes,” she said. “That is when I lock myself away.”Once she goes over the budget a second and sometimes third time, she’ll send it to the City Council. By law that must happen 170 days into the new year. Kennedy said she typically has it to the council by mid-May.”It’s usually by May 22, then it’s up to the council to schedule its public hearing and vote on it,” she said.Kennedy said she hasn’t seen any major surprises or stumbling blocks in the budget yet, however, she is still waiting to see how the net school spending shortfall will be resolved.In March Kennedy said “there will be tons of layoffs” if a disagreement with the state over local school spending couldn’t be resolved.The Department of Elementary and Secondary Education requires communities to contribute a certain amount of money that, when combined with state educational aid, represents a community’s “net school spending requirement,” or what a community is required to spend on education.Kennedy is looking to local legislators to craft a plan to adjust the net school spending obligations for cities and towns including Lynn. But there is still the issue of what the state said is past due.State Education Commissioner Mitchell Chester warned local educators by letter in February that Lynn has fallen $8.6 million below its net spending requirement and it must bridge that gap.”It’s in the hands of the legislators right now,” Kennedy said. “I’m remaining confident that it will be addressed and it will be addressed to my satisfaction.”