Lawmakers choose pupils over tax break

Delegates take rollback off table, add $50 million for school construction

April 08, 2005|By David Nitkin | David Nitkin,SUN STAFF

Maryland property owners wouldn't get a tax break in the coming year, but school construction would get a $50 million boost under a state budget plan agreed to late yesterday by General Assembly negotiators.

After hours of private meetings between House and Senate fiscal leaders, the House of Delegates agreed to drop its push for a rollback of the state portion of the property tax, which was increased in 2003 under a budget balancing compromise with Gov. Robert L. Ehrlich Jr.

House leaders had wanted to give homeowners a break of $48 for each $100,000 of their home's property value. Senators said the state couldn't afford the cut.

The tax cut, as well as the level of school construction funding, were the two largest sticking points in the $26 billion state budget for the fiscal year that begins July 1.

The Senate had proposed $200 million in construction funds, while the House wanted to spend $250 million - the annual amount recommended by a blue-ribbon task force.

"We're going to go to $250 million on school construction, and they are going to take property tax off the table," said Sen. Ulysses Currie, chairman of the Budget and Tax Committee, in an interview last night.

The final plan is expected to be endorsed by a panel of negotiators today, and the budget would be approved by the Assembly this weekend or Monday, the last day of the legislative session.

Del. Norman H. Conway, the Eastern Shore Democrat who heads the House Appropriations Committee, said the agreement includes a statement to be adopted into the budget that it is the intent of the General Assembly to lower property taxes in future years.

"It will be intent language, that we will look at it in the future," Conway said.

House leaders wanted to reduce the tax in part because they believe Ehrlich will make a similar announcement of his own soon.

But fiscal leaders said last night that it was clear that the state's budget was underfunded in several key areas - particularly the Department of Juvenile Services, which analysts said could face a $20 million shortfall in the coming year.

Because of that, several lawmakers said it might be better to bank the state's surplus for a few months, rather than spending it on a tax reduction.

Ehrlich budget secretary James C. "Chip" DiPaula Jr. told budget negotiators last night that the governor was expected today to submit a budget amendment for $8 million for the juvenile services department in this fiscal year.

The department has spent more money on salaries and residential placements than it budgeted, he said, a disclosure that drew the ire of lawmakers.

"It's a great concern that these budgets don't meet the needs of what is going to be there," said Sen. James E. DeGrange Sr., an Anne Arundel County Democrat.

The final budget largely follows the outlines of the plan submitted by Ehrlich in January. It contains a record increase for K-12 education, does not raise taxes and does not contain money from slot machines, though Ehrlich had made slots a priority.

The legislature cut about 500 vacant positions from the budget to help pay for rising health care costs of state employees.

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