ANNAPOLIS – House leaders vowed Wednesday to provide $250 million per year to pay down the multi-billion-dollar backlog in statewide school construction needs — a proposal that does not rely on slot machine revenues.
House Speaker Michael E. Busch, D-Anne Arundel, and other House members, proposed taking $100 million of $227 million Gov. Robert Ehrlich dropped into the state’s Rainy Day Fund in excess of required amounts. Busch also has proposed a bill, heard in the House Wednesday, to close a real estate transfer tax loophole and devote the estimated $60 million from that to school construction.
With some money that Gov. Robert Ehrlich already devoted to school construction in his 2006 budget, the House leaders said they can come up with the full $250 million commitment.
“Education is the No. 1 priority in Maryland,” Busch said. At the State House news conference, Busch also announced plans to repeal a 5-cent increase from the now 13-cent state property tax. Busch would need to come up with $166 million to make up for the loss in property tax funds.
The school construction proposal is much different from Ehrlich’s.
Ehrlich earmarked $155 million in his state budget for school construction and said he’d devote $100 million more from slot machine revenues, should a bill to make them legal pass this session. Slot machine gambling bills have failed in the House the past two years.
Schools requested nearly $600 million for school construction this fiscal year, and outstanding unfunded needs approach $4 billion.
The House plan will provide the $250 million a year for school construction that was recommended by a task force to make up the deficit.
When asked how his plans fit into Ehrlich’s plans for slots, Busch denied having a connection.
“(Slots) doesn’t fit into any category as far as I am concerned.”
Busch also said he hopes his HB1 school construction bill passes this session.
The bill would close a tax loophole that allows limited liability corporations to avoid paying the transfer tax that other corporations and county homeowners are forced to pay when real estate changes hands. It is expected to generate $60 million towards school construction.
Ehrlich opposes closing the tax loophole.
“I’m tired of being the only backstop in town here,” Ehrlich said. “I don’t think it’s good policy. I don’t think it’s a very good idea.”
He suggested the House devote funds, should it pass the bill, to Program Open Space, which purchases land for parks and conservation areas.
“We have a way to fund school construction another $100 million a year,” he said.
Busch’s tax loophole proposal last session failed to get out of the Senate Budget and Taxation Committee after passing the House with a 214-17 vote.
Sen. Ulysses Currie, D-Prince George’s, Senate budget chairman, supports the bill, but is not sure if the bill will pass this year.
“Until the committee hears the bill, we won’t know whether or not we have the votes to past it,” he said. “But I do plan to vote for the bill.”
Sen. David Brinkley, R-Frederick, said the speaker’s moves were an attempt to nullify the incentive for the General Assembly to approve slots — allocating even more money for school construction.
“He’s desperate to do something,” Brinkley said. “He’s desperate to justify his continued obstructionism on slots.”