Gov. Harry Hughes, unveiling the last of three proposals he has made this week to boost Maryland's economy, proposed today adding $2.5 million to the 1983 budget to spur minority businesses.
The money is part of an $8.7 million supplemental budget that Hughes proposed to add to the $6.2 billion budget being considered by the General Assembly.
The additional money would come primarily from increased revenues from the state lottery and interest on state investments, which more than offset a drain of revenue that resulted from a drop in sales and income tax collections in the first three months of the year.
The supplemental request also included about $1.3 million for prisons, short of the extra $3 million that Corrections Secretary Thomas Schmidt had requested, and $330,000 for Morgan State University, a black institution.
The $2.5 million for minority businesses will be lent through the state's Small Business Development Financing Authority and will involve the six largest banks in Maryland. Administration officials said the banks have agreed to match state funds for loans on a 3-to-1 ratio, meaning that a pool of $45 million could be available to minority businesses within three years.
Administration officials said Hughes had hoped to make $5 million available for the program but had to lower the figure when the nation's economic slump left the state with fewer revenues than expected.
The commitment of state money for these programs comes one day after Hughes announced that $116 million in state funds would be targeted this year for low- and middle-income housing programs.
The decision to allocate additional funds for the prison comes just as legislators have begun to discuss options for building a new prison to accommodate the state's overcrowded penal institutions.
Of the money that Hughes includes in the supplemental budget, $250,000 will be spent for security fencing at a prerelease center in Hagerstown. The center will be converted into temporary housing for 150 inmates. Funds will also be used to hire 44 more corrections officers.