House Democratic leaders pledged yesterday to add $100 million into school construction funding, on top of money generated by a proposed bill to close a corporate real estate tax loophole.
House Speaker Michael E. Busch said that though Gov. Robert L. Ehrlich Jr.'s budget proposal would increase school construction funding to $157 million, that falls far shy of the $250 million a year recommended by a state task force report last year.
"We'd like to thank the governor for making that investment, but we're going to add an extra $100 million," Busch said at a news conference, surrounded by dozens of local officials and Democratic lawmakers.
Ehrlich does have another proposed solution: the slots bill he and Senate President Thomas V. Mike Miller are pushing. They argue that if slot machines are allowed to operate in Maryland, the state can devote an additional $100 million a year to school construction funding.
"I hope they checked with Coppin and Shady Grove and Hopkins and all the other recipients of those dollars," Ehrlich said, referring to the possibility of capital projects for those institutions being delayed or eliminated. "If they did not, I don't think they are fulfilling their fiduciary duty."
Miller, too, said he prefers raising school construction money through slots but didn't rule out House calls for closing the real estate tax loophole or increasing the state's debt.
House leaders did not specify how they would come up with the $100 million, but aides said it could be done through a combination of delaying projects, using money in the state's surplus fund and paying for some capital projects in the operating budget.
Busch also announced the introduction of a bill that would charge corporations' recording fees and transfer taxes when property worth at least $1 million is transferred, closing a loophole under current law.
House Democrats want to earmark the money generated from the bill -- which they estimate could reach up to $60 million -- to school construction for the next four years. Most of that money would return to the counties, with about $10 million reverting to the state.
Busch introduced an identical bill last year, which passed overwhelmingly in the House but didn't make it to the Senate floor for a vote. Yesterday, Ehrlich said the bill was not "a good idea" and that he would veto it if passed.
At a House hearing on the bill yesterday, Baltimore Mayor Martin O'Malley called it an issue of "tax fairness."
But business leaders oppose the bill, which they say could drive businesses out of Maryland.
Sun staff writer David Nitkin contributed to this article.