The spending plan approved by the House is similar to the one submitted by Gov. Robert Ehrlich in January and passed by the Senate last week. It relies heavily on one-time fund transfers and closing of tax loopholes to eliminate an $800 million shortfall in the 2005 budget.

The House trimmed $175 million from Ehrlich's budget and left a $250 million surplus to cover unexpected expenses in Medicaid, mental health and special education programs.

"It's really special when everyone can come to agreement on the most important document that we vote on," said House Speaker Michael Busch, D-Anne Arundel.

The clash between the Democratic-controlled General Assembly and the Republican governor is over how to balance future budgets. Mandated increases in education spending, Medicaid and other programs leave the state with a projected $1.2 billion budget deficit in 2006.

The House budget package includes a contentious $1 billion tax increase, offset by about $350 million in property tax relief, narrowly passed Friday but opposed by Ehrlich and Senate leaders.

Senate President Thomas V. Mike Miller Jr., D-Calvert, who has deemed the tax package dead on arrival in his chamber, said Ehrlich and Busch need to compromise on a smaller tax package that could complement the slots proposal pushed by Ehrlich and passed by the Senate.

House and Senate negotiators will meet next week to hammer out a tax compromise, said House Appropriations Committee Chairman Norman Conway, D-Wicomico.

"We'll have to revisit all (revenue) options out there," Conway said. "I just hope people haven't put themselves in such a box that we can't come out with a reasonable approach."

The Senate approved a smaller $227 million package of taxes and fees.

After two days of heated debate on Busch's tax hikes, Friday's discussion of the budget was relatively anticlimactic, with the only discord involving government-funded abortions and language in the budget bill to weaken the governor's budget powers.

Delegates voted 47-91 to keep a provision that removes the governor's authority to temporarily withhold funds appropriated by the Assembly. Last year, Ehrlich withheld $651 million while the Board of Public Works decided which programs to cut to close the state's budget shortfall. Funds not cut by the board were later released.

"(The withholding of funds) made an end-run around the budget approved by the Assembly," Conway said.

Republicans said the move ties the governor's hands in a fiscal crisis.

Delegate Joseph Boteler, R-Baltimore County, offered an amendment to the budget bill that would have restricted the circumstances under which poor women could obtain Medicaid-funded abortions.

Currently, women on Medicaid can get a publicly funded abortion if their pregnancies are the result of rape, or if the pregnancy would threaten the mother's physical or mental health. Supporters of the amendment said the exceptions were too broad. The amendment was defeated 56-83.

Copyright © 2004 University of Maryland Philip Merrill College of Journalism