- The Washington Times - Monday, March 8, 2004

ANNAPOLIS — Baltimore will not seek a state bailout of its public schools but will use $42 million from the city’s rainy-day fund to help make up a deficit in the ailing school system’s budget, Mayor Martin O’Malley told lawmakers yesterday.

The word came as legislative leaders prepared to introduce a bill submitted by Gov. Robert L. Ehrlich Jr., Republican, that would have provided a $42 million state loan in return for creating a new authority to run city schools for the next 22 months.

Senate President Thomas V. Mike Miller Jr., Prince George’s Democrat, said he pulled the bill from the agenda after talking to the Democratic mayor last night.

“It appears that the matter, for the present, has been settled,” Mr. Miller said.

Baltimore lawmakers said the mayor’s decision was good news because it will avoid a state takeover of the school system.

“It was something that had to be done,” Delegate Maggie McIntosh, Baltimore Democrat, said after she and other lawmakers from the city met with Mr. O’Malley after an evening session of the House of Delegates.

Senate Majority Leader Nathaniel J. McFadden, Baltimore Democrat, told the Senate that the city appreciated the governor’s offer to provide a loan to help cover a deficit of $75 million. But he said city officials believe Baltimore should solve its own problems.

Mr. Ehrlich said he believed his bill “would have begun to fix a dysfunctional system” and would have been good for students, teachers and parents.

“We just hope this bailout works,” he said.

“Hopefully, they will have learned their lesson,” Mr. Ehrlich said. “The history here would not make one optimistic.”

The mayor’s announcement came after about three weeks of intensive negotiations between city and state leaders that began after teachers rejected proposals that they take a pay cut to help cover a huge deficit in the city school-system budget.

The budget was $75 million in the red by the end of January, but cost-cutting measures already implemented are expected to reduce the deficit to $58 million by the end of the fiscal year on June 30.

Mr. O’Malley proposed to lawmakers that the city, which had offered $8 million to help cover the deficit, increase its contribution to $42 million.

He said the private Abell Foundation, which had offered an $8 million loan, has agreed to come up with $16 million.

Mr. Miller said the city might still come back to the legislature seeking more money, but for now is saying “it wishes to control its own destiny, or at least the destiny of the Baltimore city school system.”

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