Deficit in city school funds Schiller orders freeze

$7 million gap blamed on past overspending

Cuts of $20 per pupil

Use of Medicaid funds for special education improper, chief says

March 12, 1998|By Liz Bowie and Stephen Henderson | Liz Bowie and Stephen Henderson,SUN STAFF

Baltimore's interim schools chief, Robert E. Schiller, has frozen many budgets throughout the system to help patch a $7 million deficit that comes from overspending by the former school administration.

As a result, school principals are scrambling to stop spending -- on everything from textbooks to copy paper to library books and bus trips -- to save as much as $20 per student before the end of the year.

"I am trying to cobble together savings," Schiller said yesterday. "This is the result of unfunded items in the budget" dating back as far as three years.

The deficit and the failure of the system to close the spending gap raise questions about the way former Superintendent Walter G. Amprey and his staff handled the school district's finances.

The $7 million deficit appeared when special education services were added by school administrators in fiscal 1996. Although the services -- mostly of counselors, teachers and other personnel -- were necessary to fulfill the schools' legal special education responsibilities, the costs were never inserted into the budget.

Instead, school administrators used federal Medicaid reimbursements to offset the expenses of the special education services. Schiller says that was wrong. The Medicaid reimbursements are intended only to supplement special education services, not to pay for them.

When Schiller arrived on the job last June, he said, he had no choice but to use the Medicaid reimbursements from fiscal 1997 to close that year's budget. But to do so again this year, he added, would be unwise.

Schiller said the federal government could force the district to repay the Medicaid money if the practice continues.

He is working now to find additional revenue to cover the $7 million in special education costs, and cut other expenditures.

Schiller has ordered principals to cut $20 per pupil from their school house budgets and not to hire new staff. He has ordered several schools that serve disruptive students, called APEX centers, to be closed in late March. The teachers and students will be transferred to existing schools.

At school headquarters on North Avenue, Schiller has reduced overtime, laid off temporary employees, frozen positions that were to have been filled and stopped most travel and the purchase of computers.

"Our intent is not to affect services to students," Schiller said.

Some principals said yesterday that the budget cuts will have minimal effect on their schools, but they are making changes.

"It is real for us," said Goldye Sanders, principal of Harford Heights Elementary School, who has to cut $25,000. Sanders was going to put library books in each classroom this year, but now she won't. She also is cutting back on supplies and bus trips to make up the difference.

At Southwestern High School, Mildred Harris said she won't hire a new employee to do clerical work. She's stopped magazine subscriptions and cut back on pens and pencils.

At Woodhome Elementary, Ronne J. Lippenholz said: "We took a little bit from here and a little bit from there." The school had a few thousand dollars it hadn't spent for textbooks and for teacher training, she said.

Lippenholz has rationed paper for the copy machine, so that students may have to copy material off the bulletin board rather than get photocopies.

"It has some impact, but if it is spread over a lot of areas, there won't be any things that should get done that won't get done," said Harold Eason, principal of Charles Carroll of Carrollton.

At Southwestern and Harford Heights the budget cuts could have been far worse, the principals said, except that they had a small windfall of cash late in the year which they hadn't spent. The extra money had come because enrollments had been higher than expected. A school's budget is based on the number of students.

The school district's budget problems extend beyond the $7 million in additional special education costs. About $3 million in unbudgeted expenditures -- including severance payments to Amprey -- remains from last year's budget. The city has agreed to cover those costs.

But Schiller says virtually every new week in the school district brings new unbudgeted expenses that send school officials scrambling to find money.

For instance, the schools recently discovered that they had overcounted students last school year and as a result owe $365,000 to the state. Health insurance premiums on some school employees went up by $1.8 million this year and a new detention center for youths who have been through the judicial system cost the schools $340,000 -- two more unbudgeted expenses.

Meanwhile, the city's allocation to the schools remains flat. And the $50 million in new money from the city-state reform effort cannot, by law, be used to cover operating expenses.

"Every time you add costs, you need to find revenues to cover them or cut other expenditures," Schiller said. "That was not happening here."

The school board will meet Saturday to go over the budget problems, and hopes to avoid deeper cuts in school-based services. Primary among the board's concerns is clearing up any financial difficulties before finalizing expensive reform plans for next September.

"If you don't know how much money you're spending this year, how are you going to plan for next year?" board chairman Tyson Tildon asked.

Pub Date: 3/12/98

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