Schools mark end of deficit by repaying city $8 million


Baltimore school officials handed Mayor Martin O'Malley and City Council President Sheila Dixon a ceremonial check for $8 million yesterday, marking the end of a fiscal crisis that crippled the system two years ago.

The system is now deficit-free for the first time in seven years, officials said.

To prevent the system from having to accept a state bailout and takeover in 2004, O'Malley lent the system $42 million from the city's "rainy day fund." The system at the time had a $58 million deficit that was on a trajectory to reach $90 million, schools Chief Executive Officer Bonnie S. Copeland said yesterday at a news conference, surrounded by politicians at City Hall.

The system repaid $34 million of the loan last year and the remaining $8 million yesterday. Officials said the system has also been able to establish its own "rainy day fund" to cover future unforeseen expenses.

"There were so many who said it could never happen," said O'Malley, a Democratic candidate for governor who has sparred with state officials -- particularly Republican Gov. Robert L. Ehrlich Jr. -- over control of the city's schools. "But together, we did it."

O'Malley used the opportunity to praise the achievements of the city's schools. He said the third-grade proficiency rate in reading improved from 16 percent in 2000 to 61 percent last year. However, Maryland school systems use a different standardized test now than they did in 2000, and experts caution against comparing the results of different tests.

On the current test, the Maryland School Assessment, the pass rate in third-grade reading improved from 39 percent in 2003 to 61 percent last year.

The previous test, the Maryland School Performance Assessment Program, measured the performance of schools but not individual students.

As school officials thanked O'Malley and City Council members yesterday for standing behind them during the fiscal crisis, the state education department said its contributions to Baltimore's schools should not be overlooked.

The state has increased funding to city schools by more than $200 million since the so-called Thornton legislation, designed to equalize school funding, took effect in 2003, said William Reinhard, a spokesman for the Maryland State Department of Education.

The increase in state funding has come along with an increase in state instructional requirements, such as all-day kindergarten for all children.

Ehrlich's office released a statement yesterday that said, "Gov. Ehrlich is proud to have made this check possible by providing Baltimore City Schools with record funding increases for four straight years."

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