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Ehrlich proposes state property tax increase

March 17, 2003|by LAURA ERNDE

laurae@herald-mail.com

Maryland Gov. Robert L. Ehrlich proposed an increase in state property taxes Friday to help balance the budget as well as restore money for a popular prescription drug program.

Warren Deschenaux, the legislature's chief fiscal adviser, said the state portion of the property tax - now eight cents per $100 of assessed value - would have to increase to almost 13 cents to free about $165 million needed to balance the budget.

Taxes on a house valued at $150,000 would increase from $120 to $195.

The constitution specifies that the property tax is to be used to pay off bonds sold by the state, but the legislature and previous governors have held the tax at eight cents by using other state funds to pay part of the debt service.

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Republicans were not enthusiastic about the property tax portion of the plan.

Del. Christopher B. Shank, R-Washington, said he would rather see the state cut its capital expenses.

"I'm just hopeful we can really pinch and really tighten the belt and find that money," he said.

Ehrlich's new budget-balancing proposal would increase fees paid to businesses by $85 million and cut spending by the same amount to keep the budget in the black.

But it adds $2 million for the Medbank program, which helps patients fill out the necessary paperwork to qualify for free prescription drugs from pharmaceutical companies.

Started in Hagerstown before expanding statewide last year, the program was due to expire at the end of June.

Audrey Miller, director of the program for Western Maryland, said she hopes the program will survive the legislature's budget cuts.

So far, Medbank has helped about 1,300 people in Washington County, she said.

Ehrlich also restored $2 million to the budget for the state's child care referral network.

Originally, Ehrlich had cut the network's 2004 budget from $5.8 million to $1.8 million.

A cut of that size probably would have forced Apples for Children of Hagerstown to close its doors.

The nonprofit that serves the Garrett, Allegany and Washington counties gets half of its $800,000 annual budget from the state. The rest is dependent on that state grant, Executive Director Fanny Crawford said.

Even if the legislature preserves the $3.8 million in the budget, there is no guarantee that any of it would come to Apples for Children, she said.

The Associated Press contributed to this story.

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