After two years of overspending, the city school board continued to grapple last night with ways to get its financial house in order as it faces the prospect of carrying an estimated $28 million deficit into next school year.
Criticized earlier in the day for ineffective management by Mayor Martin O'Malley in his State of the City address, the nine-member school board discussed spending limits for the district's 2003-2004 operating budget, including deferring new textbook adoptions for a savings of about $5 million and consolidating some special education services for an additional $5 million.
School officials said last night that the board was committed to eliminating the system's cumulative deficit by June 2004. The board also is determined to create a reserve fund -- of about $9 million -- in next year's budget to help prevent the kinds of deficit spending for which it has been criticized.
"For a lot of reasons, there's a need to start putting aside some money for a rainy day," said schools Chief Operating Officer Mark Smolarz.
Board Vice Chairman C. William Struever also said it plans to put aside an additional $5 million for high-priority initiatives, such as middle- and high-school reform.
The board, however, shied away from tackling some of the big-ticket cost-saving items suggested by administrative staff. Struever said it plans to discuss those ideas later this month.
Those proposals include reducing staff by about 550 employees, largely through attrition.
That approach -- called "right-sizing" by school officials -- would save the system more than $27 million next year, Smolarz said.
Board members also will be considering whether to scale down a five-week summer school that, last year, was attended by about 20,000 students who failed to meet strict new promotion requirements.
At a work session Saturday, board members said they hoped to keep the district's ambitious summer school program intact even though it has been expensive -- an estimated $17 million.
Chief Executive Officer Carmen V. Russo has recommended reducing summer school in a number of ways, including requiring fewer students to attend or reducing the session from five weeks to four. The board is largely in favor of charging high school students $75 to attend summer session and reducing the number of sites where summer classes will be held.
Officials also are considering whether to reduce the pay of teachers working during the summer -- from $36 an hour to $30 -- for a savings of about $2.3 million.
One of the most important components of the budget -- how much of a raise teachers will get next year -- will not be determined until negotiations with the teachers union are completed. Russo's first draft of a budget for next year is based on a 2 percent increase in salaries. Smolarz also showed board members how the budget -- and the deficit -- would increase if salaries went up by 4 percent.
Every 1 percent raise costs the system between $6 million and $7 million, and health benefits are projected to rise significantly, officials said.
The extent of the school system's financial problems began to surface in November, when officials announced that it had a $9 million deficit from the 2001-2002 school year. Russo then estimated this year's deficit would balloon to an additional $31 million unless action was taken to curtail spending.
To reduce this year's deficit, the district laid off 268 temporary workers in December andcut some spending at schools. They backed away from proposed furloughs or layoffs when employee unions balked.