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By Mike Torralba
Capital News Service
Friday, Feb. 4, 2005

ANNAPOLIS - Gov. Robert Ehrlich has used the prospect of a boost in public-school construction funding as an incentive to legalize video slot machine gambling.

House Speaker Michael Busch, D-Anne Arundel, has introduced his own plan for helping Maryland's aging schools.

Although Busch says his proposal is not an effort to undercut Ehrlich's slots initiative, it does open another avenue lawmakers can take to procure money for schools in their districts. Just where that road leads isn't clear yet.

The Republican governor's capital budget sets aside $157 million for school construction. He says slots not only would provide an extra $100 million in the fiscal year beginning July 1, they would also provide a large and continuing stream of revenue to fund school construction.

Busch says he can come up with $250 million -- a funding level recommended by a study group on school construction -- this year by taking what Ehrlich's budget already spells out and pairing it with another $60 million to come from closing a loophole in real estate transfer tax. That leaves $33 million, the source of which Busch has yet to publicize.

Delegate Victor Ramirez, D-Prince George's, said Busch's proposal "is just as appealing, I would say, or probably even more so" than Ehrlich's slots initiative.

He said he favored Busch's proposal over Ehrlich's because all the counties would bear the tax burden rather than exposing selected counties to potential harmful consequences of bringing more gambling to the area.

Slots proponents have touted slots as the solution to several problems. Before slots became a proposed solution to school construction funding, it was pushed the solution to close a budget deficit.

"Everybody's trying to look for a justification for slots for the budget. What's the point of that?" Busch said Thursday. "That's not why we're here."

Alongside his school-construction proposal, Busch announced he would roll back property taxes by $166 million. He would take $100 million in excess of the minimum required balance of the Rainy Day Fund to fill most of the void and will tap other funds for the remainder. He has not provided the details of the proposal.

Maryland's economy has improved and existing revenue sources are expected to grow. But Maryland's projected spending continues to widely outpace its income, so some lawmakers question whether Busch's plans are possible.

"You need revenues in order to cut them," said Senate President Thomas V. Mike Miller Jr., D-Calvert. "We don't have the revenues, so how are you going to cut them?"

Senate Minority Leader J. Lowell Stoltzfus, R-Somerset, said he was concerned about Busch's skimming the Rainy Day Fund.

"I don't think his arguments are sufficient to do that," Stoltzfus said. "If you're doing rational budgeting you don't do that."

Warren Deschenaux, policy analysis director for the non-partisan Department of Legislative Services, said the feasibility of Busch's proposal depends on how much the General Assembly cuts from Ehrlich's budget.

If the slots bill is killed for a third straight year, there would be little reason for Ehrlich to risk the embarrassment of having it shot down in 2006, when Ehrlich runs for re-election, said House Minority Leader George Edwards, R-Garrett.

"You got an election coming next year, and some people don't want the governor to look good," he said.

But even if slots don't pass, Ehrlich could still win politically.

"He'll have proposed it for three years, and Democrats will have thwarted him for three years in terms of his efforts to raise money and avoid tax increases," said Miller, a key ally in Ehrlich's fight to legalize slots.

Ehrlich said Wednesday that Busch's plan "doesn't scratch the itch" for school construction, which, at last count, would cost $3.9 billion to restore all the ailing schools in the state.

The governor accused Busch and his allies of trying to torpedo his slots initiative before it even goes to committee.

"If they want to kill the bill they should do it, and they should do it in a transparent way," Ehrlich said.

Busch said meeting the need for school construction is the sole reason for his proposal. He said slots were never part of the equation.

"The mentality that somehow the governor thinks this deals with slots, you know, boggles the mind," Busch said.

Busch's plan is the latest twist in the long-running feud between Ehrlich and Busch over slots. Reluctance on both sides to speak to each other has helped sustain the rancor.

Busch said the governor hasn't met with him on any matter since mid-December. They last talked about slots in September.

"You think he had any conversations with anybody? 'What you like, what you don't like, what can we do?'" Busch said. "Obviously, I don't think he's interested."

Busch has not been forthcoming with Republicans, Edwards said.

"I've not been invited to sit down and talk about things," Edwards said, adding that communication "works both ways."

Copyright © 2005 University of Maryland Philip Merrill College of Journalism