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Baltimore schools CEO warns of potential $60 million budget gap: ‘I’m not at panic mode yet’

The Baltimore school system could be facing a $60 million budget gap in 2021, CEO Sonja Santelises warned the City Council on Tuesday night, if state and local governments don’t come through with more funding.

Potential declines in state money, coupled with an anticipated increase in personnel costs and other new expenses, could contribute to the shortfall, according to a district analysis.

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Still, Santelises said "I’m not at panic mode yet” because numerous funding questions still have to be answered by the time the district’s budget is finalized in the spring.

The school system in 2017 confronted a $130 million gap, but city and state officials rallied to secure an additional $180 million for Baltimore schools, which was doled out over the next three years. The infusion kept Santelises from having to lay off hundreds of people and it stabilized the district’s finances — at least for the time that money flowed.

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This latest projected deficit comes at the end of those three years. Santelises isn’t at the point where she thinks layoffs will be necessary in the coming year, but said the district might be forced to borrow from its savings if the city and state don’t pledge more funding.

“We are going to have to face some very tough questions,” she told the council.

The district’s financial state will be even more strained, Santelises said, if the state’s ambitious plan to improve public schools isn’t fully funded.

A Maryland commission studying the state’s education system, known as the Kirwan Commission, endorsed a plan last month that would eventually require $4 billion more to be spent each year on public schools. The Democrat-led General Assembly will take it on during its upcoming legislative session.

The state would kick in billions under the Kirwan plan, while local governments would also have to dramatically raise their contributions to education spending.

Baltimore City would be required to spend roughly $330 million more per year on schools by 2030, while receiving $500 million more in education aid from the state. In cash-strapped Baltimore, officials acknowledge it will be extremely challenging to come up with the money — though they’ve pledged to find a way to do so.

Without the Kirwan funding, Santelises said, Baltimore schools could face a budget shortfall of more than $150 million in 2022.

Santelises presented these budget projections during a City Council hearing focused on how Baltimore will manage to fund its contribution to the Kirwan plan.

Mayor Bernard C. “Jack” Young has asked all city agencies to plan to reduce their budgets 5% by 2022 in anticipation of implementing the Kirwan proposals.

The money would go to increase teacher salaries, bring in more counselors, improve career preparation programs, give extra support to schools serving children who live in poverty, and expand free, full-day prekindergarten.

City Council members questioned whether these 5% cuts should be applied across the board. That kind of reduction means something very different, they said, to an agency like Recreation & Parks versus the police department, which receives more than $500 million a year.

Finance Director Henry Raymond said the city is still early in its budget process. “The 5% reduction is a starting point," he said Tuesday. “We’re not going to accept every recommendation agencies offer. We will recalibrate once we see what’s being proposed.”

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He emphasized that the Kirwan plan requires an “astronomical level of funding" and budget cuts can generate only so much money.

The city’s local income tax is already set at the highest rate allowable in the state, and raising the property tax could be politically devastating.

Baltimore Teachers Union President Diamonté Brown said the finance department’s presentation was insulting.

“We’re tired of hearing what we can’t do,” she said. “We want you to tell us how we’re going to get it done.”

City Council President Brandon Scott also said he was disappointed the finance department didn’t have a clearer vision to present Tuesday night.

Closing out the three-hour hearing, City Councilman Zeke Cohen said Baltimore can’t afford not to fund the Kirwan plan: “It’s a moral imperative."

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