What's the best medicine for principals facing budget cuts even before the school year begins?

Try laughter.

County principals gathered at Broadneck High for their annual leadership conference yesterday poked fun at themselves while bemoaning a $5.5 million budget cutback ordered by the county.

The theme of the day was "Magic: We Can Make it Happen." Ron Beckett, assistant superintendent for support services, appeared on stage with a black andgold turban and cape, covering his eyes with his hand as he spouted answers to unasked questions.

"What is Northeast High School?" Beckett asked a crowd of more than 250 county administrators. "A place where athletic directors go to die."

The Northeast High athletic director's post has been the subject of controversy recently, as principal Joseph Carducci Jr. has refused to rehire longtime director Bob Grimm after firing him in May.

Jokes about the new state functionaltests, unfinished union negotiations and limited money for materialshelped ease the anxiety of preparing for a new school year.

County Executive Robert R. Neall sent memos Monday to alldepartments requesting voluntary spending cuts in the face of an anticipated $10 million budget shortfall.

The school system must draft a plan to trim $5 million from its $341 million school budget for the 1991-1992 school year -- a budget school officials say already was strained.

"I don't anticipate that this is a temporary issue," School BudgetOfficerJack White said. "If the revenue picture does improve, the money could be released later in the year."

But no one will be holding their breath for an immediate spending reprieve. And even magic tricks and music couldn't make the harsh fiscal realities disappear.

Some spending cuts already have been proposed, including about $1.5 milliongenerated by a hiring freeze, $2 million in supplies and materials and $1 million for plant maintenance.

But if school officials are off in their calculations, or if the county requests greater reductions, further cuts may reach student programs. Proposals to cut drivers education and 80 permanent substitutes -- both of which were discussed last year -- could be resurrected.

The school board is scheduledto review a plan for spending cuts during its Sept. 4 meeting.

"We're in a better position than we were last year," White said. "It iseasier to make cuts early in the year than to be half way through the year and realize we have a $5 million problem."

The school boardfaced a budget deficit last year that climbed from $8 million to $10million. School officials blamed last year's problems on the high cost of fuel oil and the great number of military dependents in the schools.

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