- The Washington Times - Wednesday, January 19, 2005

ANNAPOLIS — Gov. Robert L. Ehrlich Jr. proposed a $25.9 billion budget yesterday that increases state spending by about 7 percent — including major increases in funding for education, drug treatment and aid to local governments — while increasing the state’s rainy-day fund to almost $800 million.

“We have a balanced budget. We did not raise taxes. We have a 7 percent rainy-day fund,” Mr. Ehrlich said at a briefing on his budget for the fiscal year that begins July 1. “With this budget, with the economy growing, we can keep things going.”

Democratic legislative leaders, who said they saw the more than 2,200-page budget for the first time yesterday afternoon, quickly found a lot they did not like.

“It’s a sham, a shell game,” Senate President Thomas V. Mike Miller Jr., Prince George’s County Democrat, said.

Mr. Miller criticized the governor’s decision to cut aid to private colleges in order to give more money to public universities. He also said the governor is catering to corporate interests by eliminating the jobs of state employees who enforce state minimum-wage laws.

“This is a mean-spirited budget, as well,” Mr. Miller said.

He and House Speaker Michael E. Busch, Anne Arundel County Democrat, said the budget is $300 million more than the limit on budget growth recommended under the state spending affordability guidelines.

“Revenues grew 4 percent. Spending grew 7 percent. The numbers just do not add up,” Mr. Busch said.

Mr. Miller said the legislature is “going to work very hard over the next several months to rectify the situation and give the people of Maryland a true budget.”

Mr. Ehrlich touted his ability to balance the budget while boosting spending on key programs that help people, and to do it without a tax increase.

James “Chip” DiPaula, his budget secretary, said the governor has faced cumulative potential deficits of $4 billion the past three years, but has managed to keep the budget balanced each time without raising taxes.

Mr. Ehrlich included $100 million in his budget for pay raises for state workers. But Democrats noted that the governor did not increase funding for retirement and health care benefits, and Mr. Busch said that would cost employees more money than the $100 million they would gain from the pay raises.

Mr. DiPaula said that claim is wrong, and that Democrats simply don’t understand the issue. But he could not say how much it would cost employees to pay for changes in health care coverage.

Democrats also were unhappy that the governor once again dipped into Program Open Space funds — which are intended to be used for land preservation — to pay for other state programs. Mr. Ehrlich diverted all of the money from land-preservation programs this year, and Mr. DiPaula said only 25 percent would be available to preserve land in the new budget.

Mr. Ehrlich is proposing some modest tax breaks, including a credit on retirement income for veterans that would begin at $2.4 million and increase to $25 million over five years. He also is seeking tax credits to encourage investment in biotechnology startup companies and high-tech research and development firms.

While there are no tax increases, Democrats said the budget includes some increases in fees to raise revenues.

In the health area, the governor included $106 million in additional funding for people with disabilities and a $371 million increase in funding for Medicaid.

Local governments, which were hit hard by cuts in state aid over the last two years, would get an additional $474 million under the governor’s budget, a 10.2 percent increase. Most of that is in school aid, but Mr. DiPaula said the counties and Baltimore also will get their full share of state transportation revenues.

There also was a disagreement over school aid. As he had promised, Mr. Ehrlich increased aid for public schools by $432 million. He said that is a record increase in school aid for the second year and meets his commitment to fully fund the Thornton school-aid plan adopted by the legislature before he became governor.

Democrats, however, said Mr. Ehrlich did not fully fund Thornton because he did not include money that was designated for school systems with special needs in areas such as teaching students who come from homes where English is not the primary language.

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