Baltimore school reform law puts board in tough spot financially State's funding boost offset by loss of city's aid, political support

March 22, 1998|By Stephen Henderson and Liz Bowie | Stephen Henderson and Liz Bowie,SUN STAFF

Baltimore's public schools should be swimming in more money than they've ever had, thanks to a $30 million boost in state aid this year that will grow to a total of $254 million by 2002.

So how could there be an $11 million deficit that has prompted school officials to freeze many school budgets and look for other ways to cut costs?

Parents and community members asked that question repeatedly last week in the wake of the school district's announcement of its latest budget crisis. Such problems were supposed to vanish once the state took control and committed more money. How much longer, some asked, will the city's children have to go without?

"You're asking our children to pay for the mistakes of adults," said Morgan Wheeler, one of more than a dozen angry parents who showed up last week to hammer the school board about the proposed cuts. "I don't think you should take their money to pay for your problems."

There is a reasonable -- if complex -- explanation for the district's financial problems, though it can't be found in a cursory look at the state's increased financial commitments. It involves a deeper look at how a confluence of the law, money and politics seems to have left the new school board in a financial stranglehold, despite the new state funds.

Solving the problem is not merely a matter of balancing this year's budget, or finding enough money for next year. It may require a re-examination of the roles carved out for the city, the state and the new school board in the state law that created the city school reform effort last year.

"An unintended consequence of the [school reform] legislation has been to put the city school system in a political no man's land," said Robert C. Embry Jr., chairman of the Abell Foundation and former president of the city's Board of School Commissioners. "The school board has been more hamstrung than any school board in the state."

Loss of city support

In past years, Mayor Kurt L. Schmoke has been the school district's most powerful political advocate. He appointed school board members and had de facto say over who was superintendent. Some say he influenced their decisions to the point of micromanagement.

He also found money to patch holes in the school district's budget when costs outran revenues, as he did last year when the city kicked in $5 million to keep the schools solvent. On occasion, he allowed the schools to borrow against future revenues to cover a deficit.

Under the old system, helping the schools registered as a political gain for the mayor, because it was something he controlled and could take credit for. And he did it often.

But under the new shared city-state management of schools, the mayor's influence and political interests in the schools have been reduced significantly. Some observers say he is now less willing to shower them with money.

"He overly micromanaged the system for years," said City Council President Lawrence A. Bell III. "Now he's attempting to wash his hands. It seems he has gone from one extreme to the other."

Last week, the mayor denied a request to increase the city's yearly allocation to schools by nearly $14 million.

And although the state has agreed to increase its contribution to city schools and share in management decisions, that money comes with strings attached. The $30 million received last year by city schools could be used only to pay for new initiatives aimed at boosting achievement, not to cover operating expenses.

The funds can pay for new teachers to reduce class size or diagnostic tests to assess children's reading skills. But it cannot pay for existing teacher salaries, materials or utility bills -- operating expenses that account for most of the school district's money.

Legislators have expressed little interest in committing further, unrestricted funds to city schools.

That puts the new school board in an awkward position when confronting the district's financial problems.

Costs outpace revenues

This year's deficit is not the result of a new problem or of decisions made by the new school board during the past year.

It is the product of years of financial management that failed to confront a simple truth: For the past four fiscal years, the school district's operating costs have been growing at a much faster rate than its revenues.

Much of that growth in costs is related to the schools' renewed effort to comply with legally mandated responsibilities for special education. While special education costs have jumped nearly 44 percent since fiscal 1994, money to pay for those costs has risen by only 7 percent during the same period.

The budget shortfall is not an incidental occurrence that can be avoided in the future; it is built into the way the school district operates.

To fix the shortfall, the board must either cut costs significantly -- which might gravely affect schools and classrooms and children -- or find an additional revenue source. The latter would prove difficult, if not impossible, without a political advocate.

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