BALTIMORE -- A tiny gray book set off a tremendous debate in Baltimore's civic, political, academic and business communities this year.

It was called "Baltimore 2000," and it forecast a bleak future for one of the nation's oldest big cities. Its basic premise: Despite the city's heralded downtown rebirth and the resulting bloom of civic pride, there were gloomy and perhaps overwhelming problems ahead.

"There is rot beneath the glitter," one anonymous civic leader said in the book. "This city needs a second act," said another.

Enter Kurt L. Schmoke, cautiously.

When the 38-year-old Schmoke takes the oath of office today as mayor -- the first black elected to the post -- he will represent not only a generational change in the city's leadership but also a new set of priorities. Despite near-unanimous agreement that Schmoke must move on to problems that even the lauded mayor-turned-governor William Donald Schaefer could not solve, Schmoke begins his administration in Schaefer's shadow.

"Schaefer will probably be recognized as one of the greatest mayors of the century, whether you agree with the things he did or not," said Rep. Kweisi Mfume (D-Md.), who as a member of the Baltimore City Council at times disagreed quite loudly with Schaefer. "Everything he {Schmoke} does will be measured by that legacy."

Schmoke brings Ivy League credentials and a studious approach that political commentators say are emblematic of a new generation of black politicians. Although a relative political novice, he has great support in the city, especially in the black community.

Still, some veterans of city politics say that Schmoke is untested and that it may be hard for him to meet expectations. The reasons, they say, have more to do with federal cutbacks and seemingly unsolvable urban problems than with Schmoke's intelligence or will.

Not only will it be hard to cure the problems facing the city -- a substandard school system, a dwindling population, inadequate housing, stalled economic development -- but also it will be difficult to show improvement.

The redeveloped Inner Harbor is a shining example of Schaefer's entrepreneurship. Schmoke's battle against illiteracy and promise to make Baltimore "a city that reads" would be a much less visible landmark if fulfilled.

Schmoke says that Baltimoreans are nonetheless ready to take on such goals. "There comes a time when people feel it's time for a change," Schmoke said in a recent interview. "I think that had an awful lot to do with this past election. To a great extent, people were looking for a fresh start."

Indeed, Schmoke was hardly Schaefer's choice to carry on the legacy. Schaefer openly dislikes the Baltimore native and Rhodes Scholar with the brilliant resume. Schmoke endorsed Schaefer's opponent for governor. Schaefer endorsed Schmoke's opponent for mayor. And when Schmoke is sworn in as the chief executive of Schaefer's beloved city, Schaefer will be dedicating the new gymnasium at Mount St. Mary's College, despite a handwritten invitation from Schmoke asking him to attend the inauguration.

Where Schaefer was impulsive, Schmoke is methodical, even tedious at times. One of the most lasting memories of Schaefer's years as mayor is of his donning an old- fashioned bathing suit and jumping into the seal pool at the National Aquarium. Schmoke would probably have to be pushed in, wearing his wire-rimmed glasses and a button-down shirt.

"I've never been called a man of pizazz," Schmoke said. " . . . I look both ways before I cross the street."

A frequent criticism of Schmoke during the campaign was that he is too cautious. Schmoke succinctly framed the problems facing the city, critics said, but he offered few solutions other than "leadership." Some politicians say that Schmoke avoided risks in order to preserve the commanding lead he held throughout the campaign over Mayor Clarence H. (Du) Burns, the interim mayor. Instead, Schmoke won the Democratic Party nomination by a narrow margin.

"I certainly made a deliberate decision not to overpromise," Schmoke said. "I'm a deliberative guy. I try to distinguish between ideas that sound good and good ideas that are sound."

Mfume said Schmoke will have to be more bold when he takes office. "You can't be too cautious as mayor, because there is too much on the line," the congressman said. "He's got to abandon that when he comes to {ask for help in} Congress and in Annapolis."

But others say that even before his inauguration, Schmoke has begun to show that he is in charge. He has dismissed several department heads appointed by Schaefer and made good on a promise to create a separate department for housing. The day after his general election victory, he announced his appointments for the five-member Board of Estimates, which must approve almost every aspect of city business.

"He's grabbed immediate command of the policy-making process," said Thomas J. D'Alesandro III, who was the city's chief executive before Schaefer took office in 1970.

The only political office that Schmoke has held is that of state's attorney, and some people wonder how Schmoke will handle the political side of his new job. "Striking coalitions requires a skill and an almost innate sensitivity about individuals," said Mfume.

"I think I have a pretty good political sense," replied Schmoke. "But it's important to have good people, and I've brought on people I think can run the government."

Schmoke's inner circle includes Peter Marudas, a top aide to Sen. Paul S. Sarbanes (D-Md.) and former assistant to two mayors, and Kalman R. Hettleman, who served as state secretary of human resources under Gov. Harry Hughes.

Marudas and Hettleman provide deep experience in urban problems and the political process -- areas critical to the new administration's success.

"Baltimore 2000" sharply focused the problems facing the Schmoke team if current trends continue: "White flight" to the suburbs will continue, leaving a black population "There comes a time when people feel it's time for a change . . . . To a great extent, people {are} looking for a fresh start."

-- Kurt L. Schmoke

with four times the incidence of poverty as whites. Blue-collar jobs will dwindle, with few high-paying service jobs to take their place. The city's school system, which ranks 19th among the state's 24 jurisdictions in funding, will continue to lose students whose parents can afford to send them elsewhere.

Also, the city has a high number of vacant houses and one of the highest teen-age pregnancy rates in the country.

And the federal government, a major benefactor to the city's downtown redevelopment, can no longer be counted on. Federal aid to Baltimore dropped from $224 million in 1980 to $140 million in 1986, according to Michael Lemov, the city's lobbyist in Washington. The decline will accelerate with expected federal budget cuts.

Schmoke has offered no detailed prescription for those problems, saying that it will take time and deliberation. But he said he is aided by the fact that the business community and civic groups acknowledge that improving the schools is the city's most pressing need.

D'Alesandro said the city's establishment will turn its attention from downtown redevelopment to social problems. "Rather than reach for accomplishments in brick and mortar, you have to reach for solutions in people," he said.

He added, "Of all the mayors in my memory -- and that includes my father and me and Schaefer -- I don't know anyone who has entered the office with such a strong personal following."

Schmoke is hoping for their support -- and patience. "Even Harborplace took 18 years," he said.