- The Washington Times - Wednesday, January 21, 2004

ANNAPOLIS — Gov. Robert L. Ehrlich Jr. submitted his $23.8 billion budget yesterday with more money for health care and education while fulfilling his promise not to include increases in sales and income taxes.

The proposed budget includes an additional $300 million to cover increasing Medicaid costs and $326 million more for K-12 public schools. The budget also includes $16 million for student aid and community colleges, but no additional money for colleges and universities, which have had their budgets cut significantly over the last two years.

Mr. Ehrlich said the proposed fiscal 2005 budget comes during the state’s “worst fiscal crisis in history.”

Faced with a $786 million shortfall, Mr. Ehrlich has proposed cuts to local government, increasing state fees and other one-time fixes to balance the budget.

“The budget is equipped with $534 million in spending reductions,” said Mr. Ehrlich, a Republican. “Conservatives believe government has a role, and that is to help in an efficient way. That is what this budget does.”

Mr. Ehrlich’s budget also includes $98.5 million to improve municipal wastewater-treatment plants to improve the health of the Chesapeake Bay.

“The citizens understand the priority of water quality in that Bay,” he said.

The governor also has proposed spending $65 million for new prisons and more than $130 million for merit increases and 1.6 percent pay raises for state employees.

“We asked the state employees to do more with less,” Mr. Ehrlich said. “And we believe state employees should be rewarded for their hard work.”

The Ehrlich administration has had to reconcile a more than $2 billion deficit since taking office last year, which opponents say has hurt local governments significantly.

Residents who need better public transportation will be among the hardest hit, said Delegate Norman H. Conway, Wicomico and Worcester counties Democrat and chairman of the Appropriations Committee.

“The counties will have to pick up the level of transportation funding,” he said.

He also said the increases for education will be offset by the cuts.

Mr. Ehrlich proposed balancing the budget through increased state fees and one-time fixes such as moving about $383 million from a transfer-tax fund, withholdings to local governments and other smaller funds. Among the proposed increases is a $2.50 surcharge to residents’ sewerage bills.

“I think it was a very positive budget,” said Senate President Thomas V. Mike Miller, Prince George’s Democrat.

However, he was concerned about the lack of additional state funding to the state colleges and universities.

House Speaker Michael E. Busch, Anne Arundel Democrat, said the governor faced “a daunting problem” trying to close an $800 million gap between revenues and projected revenues.”

“The governor presented a constitutionally balanced budget,” he said. “I look forward to working with [him] during the session.”

However, he expressed disappointment that Mr. Ehrlich was relying on “a patchwork of different fees and taxes” along with cuts to local governments and use of one-time revenue sources to balance the budget, instead of working toward long-term solutions to state problems.

“It’s a budget that gets us through this year,” Mr. Busch said. “To me, this is a one-time Band-Aid and doesn’t address the comprehensive solution everyone was looking for.”

Mr. Ehrlich also proposes spending $3 million to create a state Department of Disabilities, to improve services for disabled residents.

“This is not a political statement,” he said. “It is not a feel-good statement. It’s real. It is a serious policy by our administration.”

Mr. Ehrlich said the state would spend $9.2 million for a drug treatment program for prisoners and those formerly incarcerated and $13 million for juvenile service initiatives.

“Seventy-five percent of crimes are drug related,” he said. “It is an incredible problem and it needs new thought.”

Deputy Majority Whip Emmett C. Burns Jr., Baltimore Democrat, predicted the budget would pass, though he was not happy about it.

“We’re in a … mess,” he said. “We need more money. We can’t cut any more. I think there is going to have to be some type of compromise on a 1 percent sales tax.”

Lt. Gov. Michael S. Steele said the budget “boils down to two things: health care and education.”

Mr. Ehrlich “is not spending any new money,” he said. “What he is doing is being smart about the dollars we are committing to spending.”

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