State may lose in high-stakes greed game

January 02, 2004|By Frank A. DeFilippo

MARYLAND HOUSE Speaker Michael E. Busch just doesn't get it. The more he pushes for a tax increase, the better Gov. Robert L. Ehrlich Jr. looks.

Mr. Ehrlich doesn't get it, either. The more he tries to limit slots to racetracks, the tougher becomes the slog to enact them.

The nexus here is not so much the issue of gambling, it's how to divvy up the greed. Greed is an equal opportunity employer. Like in the movie and Broadway show The Producers, everybody wants 50 percent.

Mr. Busch, an Anne Arundel Democrat, is hell-bent on not giving Joseph A. De Francis the slots franchise at his two tracks, Laurel and Pimlico. He prefers a penny increase in the sales tax (a $600 million annual revenue-raiser), but it's questionable whether he could maneuver such a hike through the House.

A sales tax increase from the current 5 percent carries with it other perils, too. It could also endanger his House seat, and with it the speakership, in an increasingly conservative Anne Arundel County.

By contrast, Mr. Ehrlich, the first Republican governor in 36 years, wants to limit expanded gambling to the tracks as a way, he says, of reviving an industry that's on life support. Or would it merely be a track-owner rescue plan? Consider two items:

Twenty years ago, the state's take from racetracks was 17.5 percent of the gross handle. Today, it's one-half of 1 percent. Where did the money go?

Three years ago, Gov. Parris N. Glendening subsidized Mr. De Francis to the tune of $10 million. Where did the money go?

Truth is, Mr. Busch doesn't really know what he wants. As a result, the committee he appointed to study legalizing slots is not sure what to recommend because it lacks direction from the speaker.

So the protocol standoff between Mr. Busch and Mr. Ehrlich is a test of the tax/no tax philosophies of the two men and their political pedigrees.

Mr. Ehrlich campaigned and won on a platform of no new taxes, which has lately been refined to mean income and sales taxes to scoot around raising fees of all kinds. His conservative base, mainly the counties circling Baltimore City, is holding him to his literal word.

Thus, every time Mr. Busch makes a statement about increasing taxes, another opportunity occurs for Mr. Ehrlich to issue a contrasting statement denouncing new taxes, allowing him to pitch to his conservative supporters and increase his standing in the polls.

Yet Mr. Ehrlich views slots as the venue for avoiding taxes and saving horse racing. Mr. Ehrlich calls the choice a "no-brainer." The two don't necessarily toddle hand in pocket. It's a very complicated "brainer," because the downside for Mr. Ehrlich is that he appears to be a toady for wealthy racetrack owners.

Again, consider the apportionment of greed.

Mr. De Francis wants the entire slot machine franchise for himself. The horsemen claim they need $75 million to $100 million of the slots proceeds to upgrade their side of the business. The folks who treat gambling addiction want a set-aside of at least $3 million to mend the wayward ways of their hapless clients. Minority entrepreneurs are claiming entitlement to a major percentage of any gambling endeavor. Casino interests are lining up with their garish Las Vegas lures. Each community that might play host to slots is ready with its tin cups and tambourines to fund extensive and expensive wish lists.

And on, and on, and on, until it appears that there'd be little of the newly found boodle for the state itself to repair the $700 million black hole in the budget.

Senate President Thomas V. Mike Miller, a Prince George's Democrat who is under investigation by the FBI for $225,000 in contributions Mr. De Francis made to a national campaign committee headed by Mr. Miller, has again emerged as Mr. Ehrlich's point man on slots.

If any slots legislation appears, it's likely to be an Ehrlich-Miller bill allocating all machines to Mr. De Francis' racetracks. If Mr. Busch amends such a bill to include a sales tax increase, the measure is DOA, done in by an Ehrlich veto. End of story.

So with the General Assembly scheduled to convene Jan. 14, and Mr. Busch still executing the old dipsy-doodle on the slots issue, this is a make-or-break session for Mr. Ehrlich, expanded gambling and new taxes. If the job of fixing Maryland's finances isn't accomplished during this session, tuck it away for a few years. The next election cycle will be here lickety-split, and no legislator will consider raising taxes just before an election.

They just don't get it.

Frank A. DeFilippo has been writing about Maryland politics for more than 40 years.

Columnist Jules Witcover is on vacation.

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