Experts sought to analyze slots plan

Ehrlich rushes to hire consultants to help save besieged gambling bill

February 12, 2003|By Michael Dresser and David Nitkin | Michael Dresser and David Nitkin,SUN STAFF

The Ehrlich administration, stung by criticism of its first attempt at drafting a bill allowing slot machines at Maryland racetracks, is seeking emergency help from an outside consultant to salvage the legislation.

State Budget Secretary James C. DiPaula Jr. said the administration is rushing to hire experts with experience in the gambling industry to evaluate its proposed plan to install 10,500 slots at four tracks.

DiPaula said the state would issue an emergency contract solicitation Friday. The contractor would have to work quickly. According to the state's "emergency procurement" request, the contract will be awarded Tuesday and the analysis would be due three days later, on Feb. 21.

The Senate hearing on the governor's bill is scheduled Feb. 26.

Horse racing industry representatives have complained that Gov. Robert L. Ehrlich Jr.'s first version of a slots bill was unworkable because it imposed one of the highest gambling taxes in the country and demanded upfront licensing fees of as much as $100 million per track.

Racetrack owners said they would be unable to make a profit with the state giving them a 25 percent share of the proceeds.

The administration's projections of revenue from the expanded gambling have also been questioned by analysts with the Department of Legislative Services. DiPaula said the consultant would also evaluate the analysts' critique as well as a proposal the administration received from the racing industry.

"We wanted to do that [review] with independent underwriters with specific experience in the video lottery terminal area," he told the Senate Budget and Taxation Committee.

DiPaula said in an interview that the administration wants to provide some profit to the tracks.

"We're doing this to benefit the state, the industry, but not necessarily to line people's pockets," DiPaula said. "We have agreed now to enter into a dialogue about the numbers in the bill."

One provision appears to hedge against the possibility that the slots proposal and state budget will not be wrapped up by the end of the 90-day session on April 7. The contract solicitation requires the contractor to be available to attend other meetings, including legislative hearings, through June 1.

DiPaula said the state Department of Business and Economic Development will conduct a second study on the economic impact of slots, including the number of jobs that would be created, the salaries for workers and the taxes they would pay.

The budget chief said that discussions so far have focused on how much money the machines will generate, but had overlooked the other related business activity.

Ehrlich defended his administration's first draft at a morning news conference.

"If you ask me whether I'm satisfied with our work product, the answer is yes," the governor said. However, he said, his aides were taking what he called "friendly suggestions" about how to change the bill.

Ehrlich said he is confident that he will be able to get a "super-majority" of Republicans in the House of Delegates, where Speaker Michael E. Busch has said Democrats won't support the legislation unless the Republicans vote for it as a bloc.

However, Majority Leader Kumar P. Barve, a key Busch ally, predicted yesterday that about 20 Republicans would join about 70 Democrats in backing legislation to delay any decision for a year.

Barve, a Montgomery County Democrat, made his prediction at a news conference held in Annapolis to launch a coalition of disparate groups that aim to derail the legislation.

The new group, dubbed StopSlotsMaryland.com, plans to mount a lobbying and grass-roots effort against the bill.

"It's a regressive tax and we're against it," lobbyist Minor Carter said at the news conference, where he was joined by representatives of church groups, tavern owners, restaurants and the League of Women Voters - among others.

Meanwhile, a top Ehrlich aide turned up the pressure on the House Ways and Means Committee, which will hear the legislation.

Kenneth Masters, Ehrlich's chief legislative officer, told lawmakers the state needs slots to generate revenue to meet the state's budget shortfall - particularly a new education funding formula recommended by the Thornton Commission.

"You all passed Thornton with no provision for funding," Masters told the committee. "We need this to fund Thornton."

Sun staff writer Ivan Penn contributed to this article.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.