Saturday Mailbox

SATURDAY MAILBOX

March 20, 2004

Now's the time for fiscal reform of city schools

Operating the Baltimore public school system is the equivalent of managing a major corporation. Its annual budget is now more than $909 million and comes from a variety of sources. The system employs 12,000 people and serves more than 91,000 students.

These facts are important to consider for two reasons. First, they help to put the system's almost $60 million budget deficit in perspective -- it's about 6.6 percent of the total budget. Second, it is not difficult to see how financial problems in a structure of this size and complexity could quickly snowball.

But that does not mean all is lost -- plenty of large corporations teeter on the brink of financial chaos and right themselves again. The prescription for success is adhering to a solid financial plan that reduces costs and expenses while maintaining or improving the product or service.

Regardless of whether the state or the city supplies the funds to cover the system's costs for the next 90 days, those funds will address only the short-term cash flow problem. The most important challenge will be for the city and school officials to make the difficult structural changes in the system's budget and budgeting system that will ensure not just short-term but truly long-term changes.

And it is critical that we not kid ourselves -- those changes will be tough to implement. They will require difficult and unpopular decisions, most likely including additional layoffs and slightly increased class sizes. The mayor and school board must not allow emotional pleas and threats to delay or defer the difficult decisions that have to be made.

The Greater Baltimore Committee and the Presidents' Roundtable, at the request of the mayor and school board, produced a report last July on the fiscal management of the school system.

When Baltimore schools CEO Bonnie S. Copeland took the helm, she embraced the report's recommendations and took the first steps toward implementing them. Now it is time to look at two of the report's most basic findings as to the cause of the school system's deficit to guide any turnaround plan being developed.

The Baltimore school system faces a structural deficit that has never been addressed. For example, for fiscal years 2001 and 2002, the system's revenues grew by about 2 percent a year while expenses increased approximately 8 percent a year. This left a 6 percent funding gap that was never addressed and continued to build.

To address this structural deficit, spending has to be reduced to a level equal to or less than projected revenues. With 77 percent of the budget going to pay for personnel, it is impossible to make the reductions necessary to address the deficit without cutting personnel or labor costs. To suggest otherwise is dishonest to the workers in the system.

Equally important, our study revealed a distinct lack of accountability and any kind of systematic adherence to the budget process.

Eliminating the structural deficit and changing the culture of complacency that permeates the system and has allowed personnel to ignore budget procedures will be tough, but not impossible.

Whether you agree with the decision or not, the mayor has chosen to bypass state assistance and put the weight of his office behind this effort. Now is the time for the school board to demonstrate the political will and strength to make difficult decisions that will benefit the system in the face of boisterous opposition.

If it fails to do so, any turnaround plan will fail.

Donald C. Fry

Baltimore

The writer is president of the Greater Baltimore Committee.

Flood insurance a hollow promise

The article "Isabel claims under scrutiny" (March 12) pointed out the questionable software used by adjusters of claims arising out of Isabel.

My home on Kent Island was flooded by Isabel and still is not fit for habitation. My experience, and that of the other 11 homeowners in my community who were flooded, mirrors the horror stories pointed out by The Sun.

Our adjuster used software that resulted in a claim amount that was way below the loss we suffered. He would not negotiate. He said it was the fault of the federal authorities and we would have to live with it. He told us that if we didn't accept within a short period of time we would lose all insurance proceeds.

This kind of "service" has no place in disaster relief.

I know that this is not the policy of the federal government, because I was the White House contact for the Federal Emergency Management Agency during the mid-1980s. FEMA is a good group of people who respond quickly and who competently carry out their mission.

But in this case, "flood Insurance" has become an oxymoron.

John A. Svahn

Reno, Nev.

The writer was an adviser to President Ronald Reagan from 1983 to 1986.

Area must combine various rail systems

The region should aspire to more than what The Sun calls a "half-built, half-measure" public transit infrastructure ("Tokens for transit," editorial, March 9).

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