City Council members shocked by schools deficit, plan hearings

City Council members shocked by schools deficit, plan hearings

City Council members expressed shock Wednesday that the Baltimore school system has run up a deficit of more than $60 million — even before $35 million in proposed state budget cuts.

Members said they were largely kept in the dark about the scale of the system's financial troubles. Councilwoman Mary Pat Clarke, who chairs the education committee, and Councilman Bill Henry, the committee vice chairman, said the council would hold hearings on the budget problems.

"It's unacceptable to have a $60 million deficit," Clarke said. "We can't live with it. We have to work with the school board to make sure we don't have to live with it."

The Baltimore Sun reported Wednesday that the school system faces a deficit of more than $60 million in next year's budget, due in part to the cost of a teachers contract approved in 2010.

The groundbreaking contract redefined the way teachers would earn raises, rewarding them for performance and continued training rather than seniority, but increased costs faster than expected. Administrators work under a similar contract.

Schools CEO Gregory Thornton has been meeting with key lawmakers in Annapolis this week to brief them on the system's budget woes. Participants said he assured them he would make cuts to close the deficit and set the school system on a fiscally responsible path, but asked them to work to restore $35 million in cuts in Gov. Larry Hogan's budget proposal.

If proposed state cuts are approved, the system's total deficit would be roughly $100 million, or about 8 percent of the $1.3 billion budget for the fiscal year that begins July 1.

Thornton also met Tuesday with City Council President Bernard C. "Jack" Young, who called the school budget problems a "fiasco."

"He came in and inherited this," Young said after his meeting with Thornton, who became school system head in July. "He said he has a plan he's going to work toward trying to reduce it. I believe he can get it done."

Thornton has said he will need to reduce staff, and will consider layoffs, as a way to balance the budget.

But in a statement late Wednesday, the Baltimore Teachers Union said it would not accept any reduction in teaching staff, layoffs or furloughs as a way to balance the budget. "We believe with a thorough evaluation of essential bureaucratic personnel and strong leadership from Dr. Thornton and others, the school system can fix this issue," the union said.

While the school system has declined to provide details of the budget shortfall, charter school operators said Wednesday they have been warning officials that the costs associated with the 2010 contract were not sustainable.

Will McKenna, co-chair of the Coalition for Baltimore Charter Schools, said charter operators have expressed concern that salaries have been rising 4 to 6 percent a year under the contract. In addition, benefits rose 13 percent in two years, he said.

In one year, five teachers at Southwest Baltimore Charter School were able to earn model teacher status, a special designation for the best teachers, officials there said. That meant the salaries of five teachers rose by $20,000 to $25,000 each — increasing the school's budget by about $100,000.

"These teachers earned it. They were outstanding teachers," said Erika Brockman, executive director and founder of the school. But the long-term financial effect was significant, she said.

As pay as increased overall, several charter school operators said, their class sizes have risen as they brought in more students to try to offset the increasing costs.

Matt Hornbeck, principal of Hampstead Hill Academy near Patterson Park, said he has been able to handle the pay increases, particularly because his school is larger. "Over the ten years we've been a charter, I've never had to release a teacher or any staff member due to the budget. I know it's not true for all schools," he said.

Several other factors are contributing to the budget deficit. The school system made a commitment to spend an additional $13 million next year toward the plan to rebuild schools, and it has increased spots for pre-kindergartners.

The past two years, the school system has taken a total of $27.5 million from its rainy-day fund to help balance the budget. Last year, the school board passed a policy requiring the fund to be paid back this year. If the board decided to delay that repayment, the deficit would be reduced.

City Council members said they were taken aback by the size of the problem.

Councilman Eric Costello called the implications of the deficit "scary."

A $35 million shortage "is unfathomable," he said, referring to the proposed state cuts. "The fact you're nearly tripling that, I don't even want to imagine the impact of that on education."

Councilman Nick Mosby said the proposed state cuts are "devastating" to schools. He called on Baltimore residents to rally in Annapolis to ensure state money is restored.

"We have to ensure our constituents know the impact this will have on the school system," he said. "It's critical. It's very troublesome."

Baltimore spent about $260 million on its public schools last fiscal year — while state government is contributing more than $945 million of the schools' $1.3 billion budget. Councilman Carl Stokes said the city's contribution is among the lowest of the state's municipalities.

"It's pretty bad," Stokes said of the deficit. "It's an accumulation of the city not putting up its fair share. It's not a matter of the schools mismanaging their money. The city has to step up."

lbroadwater@baltsun.com

liz.bowie@baltsun.com

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