Groundwater laced with arsenic, hydrogen sulphide, dissolved salts and other heavy metals is rising through the city’s network of disused mines.

The hazardous water is threatening to spill into the Bendigo Creek, and places the future of the Central Deborah Gold Mine tourism site in doubt. 

Chemical contamination and rising salinity could also impact on the region’s farming community. 

Central Victorian schools are also expected to be winners from today’s state budget, the second since the Labor government was elected in November, 2014. 

Spring Gully and Marong Primary Schools are earmarked for money to kickstart planning for major modernisations of their current sites. 

Member for Bendigo East Jacinta Allan said the cash injection ensured both schools could continue offering their students high-quality education.

"It's exciting the Spring Gully community can start planning for the future," she said. 

"It's a growing school and a growing community. 

"We need to make sure the buildings are as great as the teaching happening inside the schools."

Education minister James Merlino said his government’s budget would invest in schools outside of metropolitan areas.

“40 per cent of the funding for school upgrades announced in this Budget will go to schools in regional Victoria,” he said.

Principals seeking minor refurbishments for their buildings will receive more modest pots of cash from a new School Pride fund.

Timor Primary School, the Central Goldfields institution with just 28 pupils, will score $90,000 to give its buildings a fresh lease on life. 

The same amount has been put aside so Chewton Primary School can make small-scale upgrades to its facilities.  

Other previously announced funds to be cemented in today’s budget papers include the $4.5 million investment in Kalianna School Bendigo, and an $11 million contribution towards the long-awaited Echuca Schools Regeneration Project.

Students undertaking the VCE at Bendigo Senior Secondary College will also reap rewards from a cut of the budget, as will those attending Rochester Secondary School. 

The colleges are in line to receive $2.8 million and $5 million respectively, indicating education will be a focus of the budget.