Budget highlights

January 18, 2003

Taxes: The budget includes no tax increases, and Gov. Robert L. Ehrlich Jr. promises to veto any proposal that includes higher sales or income taxes. The governor says he would consider approving an increase in the gasoline tax if the General Assembly passed one, but he does not plan to push for an increase this year.

Slots: Ehrlich's budget assumes the legalization of thousands of slot machines at four Maryland racetracks. If approved, the state would receive $350 million next year from selling licenses to slot machine vendors. An additional $45 million would come next year from the working machines, which Ehrlich hopes to have in operation by April 2004. If slots are rejected, the $395 million will have to be made up through new revenue or additional cuts.

Public schools: Ehrlich has proposed a 7.7 percent increase for K-12 education, including $148 million to fund the Thornton legislation passed by the General Assembly last year. The rest of the increase is for other education and retirement programs.

Higher education: Four-year colleges and universities will face a $43 million reduction in aid this year to help close the shortfall in this year's budget. For next year, the budget freezes the schools at that reduced level.

Health: Public health programs would see modest increases. Ehrlich proposes an additional $128 million for Medicaid, $38 million for developmental disabilities services and $36 million for mental health services.

Transportation: To help balance the budget, Ehrlich is transfering $300 million over two years from the Transportation Trust Fund, which pays for road, transit and other transportation projects. Ehrlich says the transfer will not affect current or soon-to-be started transportation projects. But if the fund is not replenished, future projects such as the Inter-County Connector or upgrades to the Baltimore and Washington metro systems could be delayed.

State workers: For the third year in a row, the budget does not include pay raises for state employees, including no increase for workers promoted to a higher job classification. The governor is also proposing to eliminate 1,387 vacant positions while adding 431 new ones.

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