Confidence in financial reform of city schools

After many failures, some believe it can now be done

November 14, 2003|By Liz Bowie | Liz Bowie,SUN STAFF

More than six years ago, a heralded reform of Baltimore's schools promised a new era of high academic standards and crisis-free management that would rid the system of its culture of failure.

After four changes in leadership, student test scores have risen drastically, but as many as 1,000 employees may lose their jobs in a financial crisis more severe than any in recent years.

As the next wave of reformers pledges yet again a new day of fiscal accountability, two key questions come to mind: Why have repeated attempts to straighten out the finances failed? And why does the system's new leadership believe it can resolve the financial problems once and for all?

The answer to the second question began to emerge yesterday as Robert R. Neall, a former state senator who has spent three weeks analyzing the system's books, outlined the extent of the changes.

The system will attempt to spare teachers but will be more ruthless in its treatment of bureaucrats. About half of the system's 700 staff members at North Avenue headquarters and elsewhere will be laid off, not just by downsizing each department but by eliminating or consolidating entire units.

The moves will give the system a chance to break up what Neall believes are "independent fiefdoms ... that subsisted on their own without cooperating with other departments."

The first layoff notices will go out before Thanksgiving, Neall said, with the remainder of the layoffs taking place by January 1.

"We are talking about putting together a bare-bones staff that will keep the lights on, get the bills paid, and process the personnel. ... A lot of the evaluative, academic functions are going to be suspended," he said.

For example, instead of writing its curriculum, Neall said, the system may have to buy or borrow one for the next 18 months.

"We are poor and so we are going to have to act poor," he said.

Neall, a senior fiscal analyst analyst at Johns Hopkins Medical Systems known for his fiscal acumen, was asked to examine the system's books by new schools Chief Executive Officer Bonnie S. Copeland and State Schools Superintendent Nancy S. Grasmick. On Wednesday, school officials announced that the system had failed again to rein in spending.

The most pressing problem the system faced, Neall found, was that its payroll was much fatter than it could afford -- by about $24 million a year -- and still balance its budget.

The school board understood the need to reduce the number of employees last year and had instructed former schools CEO Carmen V. Russo to get rid of 600 positions through layoffs or attrition.

But that did not happen, a fact that the board did not know until very recently.

So on Wednesday, Neall and Copeland stood up and told the board it must begin sending out pink slips immediately. By taking action this late in the school year, the system will have to lay off far more employees -- as much as 8 percent of its staff -- to save the same amount of money.

Neall and Copeland say they are trying to do something much more profound than just get through this emergency. They say they must have a "sweeping, radical change in the corporate culture" to solve the long standing issues.

While the leadership kept changing, the underlying culture and way of doing business didn't, Neall believes.

Today, with the most serious financial problems in recent memory, Neall said the system has an opportunity to remake itself.

"It can be a more focused, more nimble, and more competent managerial structure," Neall said.

That kind of structure was one of the things that was supposed to happen in 1997, when the city and state formed a partnership to reform the system and offer city schoolchildren a better education. In exchange for an infusion of state funds, the city gave up its control over the schools.

The first permanent chief executive officer of the newly constituted school system was Robert Booker, who succeeded the brief tenure of an interim leader.

An accountant and chief financial officer from California, Booker was hired in 1998 to make the school system operate more like a business. When he departed two years later, he left behind a $20 million deficit.

Russo, a respected Florida educator, pledged to clean up the mess and for a while the finances improved. But when she left in July, the deficit had risen to $52 million.

Russo never excused the overspending, but said it was done because of the city's enormous needs -- for textbooks or summer school for failing students or for smaller high schools.

Indeed, despite substantial increases in state aid over the past several years, a state school funding commission and a state judge have said city schools continue to be grossly underfunded.

So like parents with a credit card and children in need of new shoes and food, school leaders didn't practice restraint and racked up larger and larger deficits each year.

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