ANNAPOLIS, NOV. 18 -- Maryland Gov. William Donald Schaefer said today that he would agree to the state spending $60 million annually during the next five years to build local schools, although that is more than he originally wanted to spend.

Schaefer said he agreed with a task force's recommendation that the state embark on a five-year, $500 million school construction program, with the state paying for 60 percent of the total.

On another Board of Public Works decision, Schaefer said that a situation in which his former chauffeur has been appointed to head a special state unit monitoring slot machines was a "terrible embarrassment" to him.

Schaefer said that his former driver Chuck Fawley was qualified for the job, but that Secretary of State Winfield M. Kelly's request to create the special unit was "badly handled by me."

The appointment came to light in news reports this week.

Schaefer has advocated the change in the state's school construction program, in which the state now picks up all of the costs of school construction. But Schaefer has said that the state couldn't afford to live up to the pledge in the past, and won't be able to in the future. Local governments, especially the wealthy ones, must pay more of the costs, he said.

"When you balance it all out, I think the recommendations are fair," said Schaefer, who had wanted to spend about $50 million each year as the state's share.

He added, though, that he would not increase the $60 million each year based on the state's economic picture, as the task force had asked. "There's not going to be any more than $60 million. That's it."

Local governments are expected to complain about the plan when the Board of Public Works, which consists of Schaefer, the state comptroller and state treasurer, meets Dec. 16 to formally vote on it. Under the proposed formula, wealthy counties such as Howard and Montgomery would be required to pay half of the school construction costs. Prince George's and Anne Arundel counties would be responsible for 45 percent of the costs, and poorer jurisdictions, such as Baltimore, would pay 25 percent.

Fawley's promotion to head the slot machine unit came after the Board of Public Works approved Kelly's request for $128,000 to create a four-person unit to monitor the use of slot machines for charitable purposes in some Eastern Shore counties.

Kelly failed to tell the board that his department did not officially have control over the slot machines and that Fawley would head the unit. Since the election, Fawley has been paid $36,000 to run the governor's mansion. Hilda Mae Snoops, Schaefer's longtime companion who has been designated the state's official hostess, now is responsible for overseeing Government House, as the governor's mansion is called.

After a Baltimore Sun story on Fawley's appointment, Kelly said he needed only two persons for the unit -- Fawley and a secretary. Comptroller Louis L. Goldstein, whose office is supposed to receive reports about the slot machines, wrote a letter turning over the job to the secretary of state's office.

Fawley, a former Baltimore city garage clerk, was Schaefer's driver for 15 years, and said he knew little about slot machines or the charitable donations law passed last spring.

Schaefer said Fawley is "straight as an arrow," and that he feels bad about the impression that he is creating jobs for his loyal lieutenants.