ANNAPOLIS – House Democrats Friday touted a retooled budget that’s expected to include $250 million to fund public school construction.
Some details haven’t been decided, but one has: Slots aren’t part of the plan.
House Appropriations Committee Chairman Norman Conway, D-Wicomico, acknowledged that much of the budget plan does not permanently fix ongoing budget problems, such as the fact that the state continues to spend money faster than it collects it.
“Budgets are not about just one year. They do have ramifications and impact in the outlying years,” Conway said. “And to the degree that we can minimize problems early on, we have the potential savings in the long run.”
Most of the school-construction money would come from $157 million Gov. Robert Ehrlich allocated for that purpose in the fiscal 2006 capital budget, which funds large projects, such as road construction, through bonds.
About $40 million in general-obligation bonds will come from other items in the capital budget. The committee will decide in the coming days which projects to siphon money from, said Delegate Adrienne Jones, D-Baltimore County, subcommittee chairwoman for the capital budget.
An unspecified amount of money would come from the over-allocated Rainy Day Fund. The House budget also takes $4.5 million from different roadside beautification projects and about $8 million from over-allocated capital projects, Jones said.
She did not rule out raising the amount of money the state can borrow, but said doing so would only be a “last resort.”
“We really don’t want to do that. That’s something we’re trying to avoid,” Jones said.
Raising the debt ceiling too much could harm the state’s sterling bond rating, which is both a way of keeping interest rates down and a matter of pride among state officials.
But even if the ceiling was raised to fund school construction, Jones said, it wouldn’t be enough to affect the bond rating.
The Ehrlich administration was not impressed with the proposal.
“It’s not sustainable in the long run,” said James “Chip” DiPaula, Ehrlich’s budget secretary. “It’s forcing out other needs of the state.”
Ehrlich spokesman Henry Fawell called the proposal “a distraction” from the fact that the House has not passed a slots bill in the last two years.
The Appropriations Committee also cut the property tax by a nickel to 8 cents for every $100 of assessed value. Ehrlich raised the property tax in 2003 to balance the budget.
Republicans charged the proposed tax cut was intended to embarrass the governor next year, when he’s expected to run for re-election.
The plan “makes it look all right now. In (fiscal) ’07, though, you’ve got to find general funds to fill that hole in the debt gap, or the property tax goes back up,” said House Minority Leader George Edwards, R-Garrett.
Democrats “are going to say, ‘We cut the property tax; the governor raised the property tax,'” Edwards said.
The governor intends to use property tax revenue next year to improve social and health programs such as Medicaid, DiPaula said.
“The governor wants the property tax low but he wants to do so on a stable basis,” he said. “What the House is doing is a one-year gimmick.”
In addition to funding school construction and cutting the property tax, the House budget would close a $120 million gap in state employee health insurance, Democrats said.
To pay for it, the committee eliminated about 195 filled positions throughout the government. The cost-of-living increase that Ehrlich had proposed for state employees was cut by half a percentage point to 1.5 percent.
The committee also restored more than $60 million for land-preservation programs.