ST ANDREWS Primary School principal Richard McGuiness said there was evidence of a direct correlation between those in jail and who cannot read.
"If they are literacy- and numeracy-illiterate they go into crime, so if we cut our special education and refugee programs the crime rate will soar," Mr McGuiness said.
The comments follow an announcement by the NSW government that it plans to slash recurrent funding to non-government schools by $67 million a year from the beginning of 2013.
Mr McGuiness said one-fifth of St Andrews' 800 pupils were in a special education or refugee program.
"Our refugee children get nine months' language support in the school," he said.
"They learn hygiene, how to clean their teeth, washing and bathing, in addition to basic language skills.
"If these children go back to the normal classroom [unhelped], they get angry, which turns to fighting and the fighting turns to injury to people and that's where police get called in."
The Catholic Education Diocese of Parramatta fears higher fee pressures on struggling families or staff and curriculum reductions — or both.
"We have around 25 per cent of our students on scheme payments," said Mark Holyoake, executive manager in the office of the executive director Greg Whitby.
He didn't rule out raising fees.
The Catholic Diocese makes an allocation of funds for each student with fees it receives from schools, plus grants.
The government wants to alter the formula that pegs per capita state grants to Catholic and independent schools to 25 per cent of the cost of educating a state school student.
Minister for Education Adrian Piccoli said the government had to make tough decisions to ensure NSW is living within its means and to put education back on a sustainable financial footing.