Assembly may miss deadline for Md. budget

Senate won't appoint negotiating team

Slots, taxes are at issue

Senate president waiting for Ehrlich-Busch deal

General Assembly

April 02, 2004|By Howard Libit and David Nitkin | Howard Libit and David Nitkin,SUN STAFF

The stalemate in Annapolis hardened yesterday as Senate leaders said there's no point in talking to their counterparts in the House of Delegates until Gov. Robert L. Ehrlich Jr. and House Speaker Michael E. Busch strike a deal over slots, spending and taxes.

The Senate is refusing to appoint a negotiating team to settle differences with the House on the budget and taxes, an unusual move that makes it probable that the General Assembly will miss a constitutional deadline to pass a budget by Monday.

For the first time during this 90-day session, the Senate's Democratic fiscal leaders also refused this week to attend their weekly breakfast meeting with top House budget Democrats.

"I don't know what you would accomplish by us getting together with the House," said Ulysses Currie, a Prince George's County Democrat and chairman of the Senate Budget and Taxation Committee.

While Senate President Thomas V. Mike Miller, a Prince George's Democrat, would not characterize the situation as holding next year's budget plan hostage over slots, he said he does not want to tackle other issues until the House acts on the governor's gambling plan.

Miller said he won't appoint Senate members to the select budget negotiating committee until Busch and Ehrlich resolve their differences on slots and taxes through private meetings.

With 11 days left in the Assembly session, there was a flurry of closed-door sessions yesterday with an eye toward crafting a grand compromise.

About 3 p.m. Busch, an Anne Arundel Democrat, huddled with Sheila E. Hixson, a Montgomery County Democrat and chairwoman of the House Ways and Means Committee, talking about a slots bill the committee may not pass. As Busch left, state budget Secretary James C. "Chip" DiPaula Jr. was ushered into Hixson's office, making a case for the governor's gambling plan.

"It was an excellent meeting," said Ehrlich adviser Paul E. Schurick, who joined DiPaula for the meeting with Hixson. "Clearly, she has some ideas that are quite different form what is in the bill that passed the Senate. There's plenty of common ground, plenty of room for compromise."

DiPaula met with Busch for about an hour later in the day to talk about slots and the budget. "I think it's fair to say that hope is very much alive," DiPaula said as he left the speaker's office. While Democrats in the House want Ehrlich to accept at least $600 million in new revenues in addition to slots, DiPaula said the governor would accept only a much lower amount.

DiPaula "is suggesting the governor doesn't have much of an appetite for raising anything significant" through new taxes or fees, Busch said. The speaker said he will not vote for slots but acknowledged that several members of his leadership team favor expanded gambling as part of a solution.

"The issue has never been slots; it's always been the budget," Busch said.

An enormous sticking point is a $670 million net increase in taxes that the House passed last week, amended to a Senate budget-balancing bill. The package includes an increase in the state sales tax rate from 5 percent to 6 percent and a temporary income tax increase for the wealthiest 3 percent of state residents, coupled with a 60 percent decrease in the state portion of property tax bills.

Ehrlich has said he will veto the taxes, and Miller doesn't want to discuss the levies because neither chamber has enough votes to override the veto.

"Unless we have 29 votes on the bill in the Senate and 85 votes in the House, we're at loggerheads; we're at a stalemate," Miller said. "That's not progress. We have to do things that are somewhat unusual but that are necessary to accomplish the end, and that's to find a way to fund public schools, balance the budget."

House leaders say they haven't heard a word from the Senate about the lack of action but are not sure how the Assembly can meet its obligation to pass a spending plan for next year by the 83rd day of session.

"Everything is at a standstill at this point," said Norman H. Conway, an Eastern Shore Democrat and chairman of the House Appropriations Committee. "I think we'll get it done, but I have not heard anything from anyone in the Senate."

The House and Senate have passed $23.6 billion spending plans with relatively few differences for the fiscal year that begins July 1. A combination of one-time fund transfers and other budget tricks ensure that both plans are balanced without any need for broader revenue increases. But projections for the years after that show a gap of nearly 1 billion between expected revenues and expenses, which has prompted the two chambers to pass their revenue measures.

To resolve the differences for next year's budget, the House and Senate typically appoint five-member negotiating teams from each chamber to work in what's known as a conference committee.

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