The Baltimore school system is facing a $35 million shortfall as
it plans for its fiscal 2013 budget, a gap that officials said
could have a serious effect on schools' spending power for the
second year in a row.  The system is projecting about $8.5
million more in revenue next year but has also noted a $43
million increase in expenses, primarily driven by labor costs
tied to the system's pay-for-performance contracts for teachers
and administrators.  The school system has not presented a full
budget as it waits to find out how much funding it will receive
from the city and state.  Michael Frist, chief financial officer
for the schools, said at the school board's meeting Tuesday
night that while the system is in a better position than last
year, "our purchasing power is decreasing in some areas" because
of flat revenues and increased expenditures.  However, Frist
said, it was too early to speculate on the effects of the
shortfall until the state budget is adopted, which will account
for about 70 percent of th