ANNAPOLIS, FEB. 9 -- More than 15,000 youngsters drop out of Maryland schools each year, and Gov. William Donald Schaefer proposed today a joint state-private industry program to persuade them to finish their education.

Schaefer's program would use $3.5 million in state funds and an unspecified amount of money from Maryland businesses to begin working with potential droputs as early as the eighth grade.

Youngsters would be provided with help that includes remedial education, jobs and motivational programs designed to improve their self-confidence and self-esteem.

"Last year, 15,000 secondary school students in Maryland put down their books, turned their backs on education and stopped going to school," Schaefer said.

"It's very sad to think that these young people are cutting themselves off . . . from the rich environment of education. It's also sad to think how much our state loses when a youngster drops out of school," he said.

Schaefer's budget includes $3.5 million for the first year of the dropout program, but a legislative budget analyst has recommended to House and Senate fiscal committees that they cut the money out of the budget.

Schaefer made it clear he was not happy with that recommendation.

"They couldn't even wait until the announcement's over before they say, 'Cut it out,' " the governor said at a news conference.

"Then you wonder why I get somewhat disturbed," he said.

The program was developed by the state Education Department and the Governor's Employment and Training Council.

Henry Butta, chairman of the council and a C&P Telephone Co. executive, said there is a major problem in Maryland caused by the high dropout rate.

"In my company, we are having trouble filling entry-level jobs," he said.

There are plenty of applicants, Butta said, but they can't read and write well enough to pass simple tests, and the company has to put them into basic training programs.

"I'm excited about this," Butta said. "The job has to be done, and it's long overdue getting started."

David Hornbeck, state school superintendent, said local schools would identify youngsters who are considered at risk of dropping out.