Robert L. Ehrlich Jr., Robert R. Neall

"Now is the time for action," says Gov. Robert L. Ehrlich Jr. (center), with Robert R. Neall, ex-financial adviser to city schools. (Sun photo by Karl Merton Ferron / March 1, 2004)

Gov. Robert L. Ehrlich Jr. said he will propose legislation as early as today to create a Baltimore school authority that could have broad powers to dissolve union contracts and cut employee pay before the end of the school year.

"Now is the time for action," Ehrlich said. "Within the next day ... we will finish our bill. It will then become the General Assembly's baby at that point."

The governor's comments came as he left negotiations with Mayor Martin O'Malley and leaders of the Maryland House and Senate. For more than a week, city and state officials have been haggling over management changes that Ehrlich is demanding before the state lends $42 million to near-insolvent Baltimore schools.

Without a loan, Ehrlich said, the city school system will begin bouncing paychecks March 26. The cash-flow crisis that worsens daily comes on top of a $58 million deficit accumulated over several years.

City parents and political leaders have bristled at state demands to relinquish some authority as a condition of the loan. O'Malley said yesterday that he believed he had negotiated concessions, including a possible agreement that the oversight panel would not be controlled by the state and would have three members who are city residents.

The composition of the panel, the Baltimore City Public School System Authority, remains undecided.

O'Malley said the panel probably would have five voting members - two appointed by the mayor, two by the governor and one by Nancy K. Kopp, the state treasurer. Kopp is appointed by the legislature and is viewed as representing its interests. Some lawmakers said last night that they hope Kopp will agree to serve.

State school Superintendent Nancy S. Grasmick or her representative would serve in an advisory capacity.

A panel that would include three voting members, two picked by Ehrlich and one by O'Malley, is still a possibility.

The mayor is opposed to breaking the teachers' contract and said he would advance the school system $18 million - $10 million through a bond issue and $8 million from a so-called rainy day fund - to keep it functioning without a pay cut.

"At the end of the day, that doesn't need to be in the draft bill," O'Malley said.

Ehrlich will likely introduce a bill he believes can pass the General Assembly, meaning that it must draw votes from Republicans and rural Democrats leery of assisting city schools. Because of that, the governor's draft could include language giving the new authority the power to alter union contracts.

"We can generally agree on most of the major principles and major policy provisions to be contained in the bill, but this is not an easy sell around the state," Ehrlich said last night. "Around the state, there is certainly the thought of 'more good money after bad' [and] 'where is the accountability?'"

House Minority Whip Anthony J. O'Donnell, a Calvert County Republican, said he was pleased that the governor was planning to offer his own bill.

"Folks are getting very frustrated by the reluctance to instill accountability in the [school] system," O'Donnell said. "The mayor appears to be feeding that, and people are ready to say, 'No more baloney.'"

While Baltimore lawmakers are insisting that union contracts be upheld, others say broad changes are needed to fix the system's finances.

"Are you trying to educate kids or protect jobs?" asked Sen. David R. Brinkley, a Frederick County Republican. "The reality is, everything needs to be on the table."

Union leaders said they believe educators across the state would pressure their representatives to oppose any provision that would tear up the teachers' contract.

"All will stand together to oppose any proposal that circumvents the contract," said Baltimore Teachers Union President Marietta English.