State officials, citing uncertainty over tobacco settlement funds, informed school systems this week that $3.5 million in challenge grants would not be coming.
"The governor has decided to turn his back on what has become a model program - one that takes schools with unique situations and improved on them," said Busch, an Anne Arundel Democrat who has clashed with Ehrlich over whether to bring slot machines to Maryland.
Busch helped establish the challenge grant for the Annapolis public schools in 2001. He said he hopes the Republican governor will rethink his decision.
An Ehrlich spokesman said the decision wasn't politically motivated. He defended the governor's spending on education, noting that funding has risen $700 million in two years - with an additional $24 million going to Anne Arundel County.
"The reason for the decision was the rapid increase in public education funding in the past few years," said Ehrlich spokesman Henry P. Fawell. "No governor in Maryland history has made a more significant investment in public education than Governor Ehrlich."
The General Assembly this year earmarked excess money from the cigarette restitution fund to provide challenge grants for schools around the state, as well as medical institutions at the Johns Hopkins University and the University of Maryland, and other programs.
However, the governor can decide whether to pay out funds added to the budget.
The bulk of the fund is used to discourage people from using tobacco products and other health-related programs, said Cecilia Januszkiewicz, secretary of budget and management.
"We don't know what the actual revenues are, and we have some concerns that they might not exceed what the estimates are," she said.
Anne Arundel County school officials were disappointed by the decision. They say nine Annapolis elementary schools - many struggling with high populations of poor children - have increased reading test scores significantly by using the grant to pay for additional staff and programming. Four county middle schools, two in Annapolis, also receive funds.
The challenge grants were set to expire in mid-2006, and Ehrlich did not include money for the grants in his budget proposal for the fiscal year that begins July 1. But the legislature tapped the cigarette fund excess to restore the money.
The Annapolis feeder system was set to receive $1 million a year through the program but for the last two years, the legislature provided about $558,000 for 11 Annapolis schools.
Mary Alice Gehrdes, a proponent of the Annapolis challenge grant who has several children in the city's schools, said she was rethinking her vote for the governor. "He has just apparently done everything possible to cancel out" schools participating in this challenge grant, she said.
Yesterday, Anne Arundel school board members approved $300,000 to help make up for loss of the grant. They also planned to use revenue from a downtown parking facility to keep the grants alive.
Anne Arundel County school officials had planned to use revenue from a downtown Annapolis parking facility to supplement the money approved by lawmakers. Yesterday, school board members agreed to replace part of the grant with $300,000 from operating budget funds.
"Kids are caught up in political football," said Superintendent Eric J. Smith, who sent a letter to Lt. Gov. Michael S. Steele about how the grant helped Annapolis schools.