April 4, 2004
  • 1997: City gives up control of its school system in return for an increase in state aid. A new school board is jointly appointed by the mayor and the governor.

  • 1998: School system finishes the fiscal year with a surplus of $6.1 million.

  • 1999: Revenues are rising quickly. The system increases its surplus to $15 million.

  • June 30, 2000: Under the administration of Robert Booker, the system overspends its budget by $33 million, ending the year with a $18.8 million deficit.

  • July 1, 2000: Booker leaves, and Carmen V. Russo is hired.

  • June 30, 2001: Russo lays off some administrative staff, and the system receives a onetime infusion of city money, reducing the year-end deficit to $8.9 million.

  • June 30, 2002: The deficit rises to $18.6 million.

  • Sept.-Oct. 2002: Two key finance officials leave. Mark Smolarz, the chief operating officer, also takes on the job of chief financial officer.

    Russo becomes a candidate for a job in Florida.

  • Dec. 2002: Russo projects deficit for the current year will be $31 million. Layoffs of 396 follow.

  • Jan. 2003: Russo and Smolarz assemble options for cutting costs, including furloughs, layoffs, increased class sizes and reduced summer school teacher pay.

    Mayor Martin O'Malley and state schools chief Nancy S. Grasmick urge school board to call in business groups to assess the financial problems.

  • Jan. 29, 2003: After unions vote against furloughs and a large public protest, Russo and board members back down from both furloughs and layoffs.

  • Feb. 12, 2003: Grasmick writes a letter to the legislature detailing the system's financial problems.

  • March 11, 2003: Smolarz writes a confidential letter to Peggy Watson, the city's director of finance, acknowledging that the system has a cash flow problem and asking for help.

  • March 18, 2003: Russo announces she will be leaving at end of June.

  • April 26, 2003: Sam Stringfield writes a series of stinging e-mails to Smolarz questioning finances.

  • June 26, 2003: Board approves budget that calls for cutting 600 employees through layoffs and attrition.

  • June 30, 2003: Russo leaves, having told Bonnie S. Copeland she has laid off about 100 central office staff.

  • July 1, 2003: A new fiscal year begins. Copeland takes over as interim CEO and says she is assured by staff the payroll will decline through attrition.

  • July 16, 2003: Two local business groups release a stinging report saying the school system has serious financial problems and make recommendations to correct them.

  • Sept.10, 2003: Smolarz says that the deficit he projected at $19 million for the year ending June 30 is actually $30 million. That number will grow over the next few months.

  • October 17, 2003: Smolarz resigns.

  • October 22, 2003: Robert R. Neall agrees to help advise the school system on financial matters.

  • December 2003-January 2004: About 900 employees are laid off.

    March 17, 2004: City Board of Estimates approves $42 million loan to city schools.