Mayor offers loan to ease school crisis


In a bid to prevent teacher layoffs and ease the financial crisis in city schools, Mayor Martin O'Malley has offered to lend the struggling system $8 million if employees accept a 3.5 percent pay cut.

The plan was worked out Monday night in the mayor's Annapolis office just 24 hours before a possible city school board vote that could have eliminated at least 1,000 jobs or imposed a 6.8 percent pay cut. It would give the school system the $16 million in savings it needs to remain solvent this year and pay down a portion of its crushing $58 million deficit.

"We believe we are taking an important step toward solvency. It is not the last step, but it is an important step," O'Malley said at a news conference yesterday. He said the money would come from the city's rainy day fund.

The announcement did little to ease frustrations among parents and teachers who heckled school officials at last night's school board meeting. School employees demonstrated outside, and police had to lock the doors to the system's North Avenue headquarters because of an overflow crowd.

The Baltimore schools' chief executive, Bonnie S. Copeland, broke into tears several times during the meeting, and one board member, Brian D. Morris, called for a criminal investigation into possible wrongdoing by former administrators but the measure was voted down.

O'Malley said the $8 million loan is contingent on school employee unions - particularly the Baltimore Teachers Union, which represents teachers and aides - accepting the pay cut. The BTU could vote as early as tomorrow; the other school unions vote Friday.

Last week, the BTU's rank and file rejected the system's proposal of a 6.8 percent pay cut or an eight-day furlough to avoid layoffs. Union leaders declined to take a definitive stance on the latest offer.

"I think it is a good-faith effort on the part of the mayor," said BTU President Marietta English. "I think the membership has to decide."

Leaders of other unions that represent school workers were more positive about the plan, in part because the school system promised to ratify their tentative contracts yesterday, giving them a 0.6 percent pay increase.

O'Malley declined to say what the next move would be if the unions reject a pay cut again.

"We're not going to think about what if it fails," he said.

Copeland said she would have to resort to layoffs or impose a 6.8 percent pay cut across the board, perhaps as early as next week. "All options are back on the table if this does not pass," she said.

Gov. Robert L. Ehrlich Jr. did not pledge any state money yesterday to get the city schools through the immediate crisis. "Not necessarily in the short term," he said.

Even if employees go along with O'Malley's plan, school officials acknowledge that more belt-tightening lies ahead.

Emotions run high

Last night, in one of the most emotional school board meetings in recent memory, parents, teachers and community members packed the small meeting room where the nine-member board assembled to hear details of the plan.

School board Chairwoman Patricia L. Welch was unable to control the jeers from the audience.

"She says she's sorry, but she ain't sorry!" an audience member yelled, referring to Welch's earlier speech in which she said the board accepted full responsibility for the system's fiscal crisis.

Parents angrily stormed out of the meeting, and others applauded loudly and cheered when speakers called for citizen action, including not spending money in Baltimore or Maryland until lawmakers come up with more funding for schools.

At one point, after hearing a teacher lament her decision to work in the city schools, Copeland began crying and remained choked up and teary-eyed throughout her presentation to the board.

"All of us are going through a very difficult time," Copeland said, wiping her eyes. "All of us are feeling angry. All of us are feeling frustrated."

At the rally outside the school board meeting last night, Evonne Flynn, a labor relations specialist for AFSCME 44 , said she supports the O'Malley plan. Her union represents bus drivers, food service workers, maintenance workers and grounds crew.

"We still have our jobs," Flynn said. "I only made $24,000 last year, so I know it is hard. ... I know we have given a lot, but we have to learn to compromise."

However, Alan Rebar, a teacher at Highlandtown No. 215, had a different message for O'Malley and Ehrlich - the governor had called Monday for more accountability in the school financial crisis.

"This is your mess," Rebar said. "You want accountability, look in the mirror."

Other teachers breathed a sigh of relief when they heard of the proposed compromise.

"As long as I have a job, I'm good," said Adell Brooks, a first-year teacher at Govans Elementary School. "I came here to teach. ... I want to be here. I really don't want anybody to lose their job. Not just me."

Talks in Annapolis

Negotiations to find a more palatable alternative to layoffs began last weekend after city teachers and aides voted Friday to reject pay cuts and furloughs.

After O'Malley and Copeland attended an Annapolis rally Monday night in support of an increase in funding for education, they met with Robert R. Neall, a former state senator and financial adviser to the school system, while union leaders met separately with the mayor's staff.

City school leaders told O'Malley they did not want a handout, but would accept a loan. Neall said he told the mayor: "I insist it is a loan."

Neall said the school system had to begin to act more fiscally responsible. "This organization is not going to be bailed out anymore," he said. "That is the way this organization grows up."

Although the loan and pay cut would help the city school system reduce its spending this year, keep within its budget and reduce the $58 million deficit from previous years, the system will have to cut costs substantially next year, Neall said.

"We are going to have to reduce our work force," Neall said.

The $8 million loan would come from what O'Malley called the city's rainy day fund and would be paid back by July 2006 with 1 percent interest. The employees would be paid back the lost wages a year earlier, in July 2005.

Pay cuts would affect everyone in the school system, including top administrators.

Some administrators and school employees who are not represented by a union and had voted to accept an eight-day furlough would have the days reduced under the new plan.

Seeking accountability

State schools Superintendent Nancy S. Grasmick said the agreement bolsters the argument for full funding of the Thornton plan, a state education reform plan that would pump millions of dollars into school districts, including Baltimore.

"If we're down here arguing for full funding of Thornton, it makes it easier to know they are using it for its intended purpose," Grasmick said.

Ehrlich said yesterday that Grasmick would have an announcement as soon as today concerning a possible investigation.

"Obviously, there needs to be a thorough investigation. There needs to be accountability," Ehrlich said. Parents and students are "not getting their money's worth."

State budget Secretary James C. "Chip" DiPaula Jr. said yesterday that he will be involved in the state review of city school finances that could be announced as early as today.

The governor "has directed me to monitor the situation," DiPaula said. "We need to see how they got into this situation and where they are going from here," he added. "But with all expenditures of state funds, we need accountability."

Sun staff writers Doug Donovan, David Nitkin, Jeff Barker and Ivan Penn contributed to this article.

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