Q&A with Maryland House Speaker Michael E. Busch

Q and A with ...

Democratic leader discusses slots legislation, education funding and related budget issues before the current General Assembly session

February 23, 2004|By Todd Beamon | Todd Beamon,Baltimoresun.com Staff

As the speaker in the Maryland House of Delegates, Michael E. Busch continues to be the most visible opponent to Gov. Robert L. Ehrlich Jr.'s proposal to legalize slot machines around the state.

Legislation passed in the Maryland Senate last year, but Busch, an Anne Arundel County Democrat, refused to allow a debate on the issue on the House floor.

While Ehrlich, a Republican, revised his proposal this year to include terminals at two non-racetrack locations, Busch remains adamant against the plan and said the state should build and own the gambling dens.

The governor's $23.8 billion proposed budget for fiscal 2005 also is a sore spot with Busch because of its extensive use of short-term revenue items as well as for the financing issues surrounding the Thornton Commission legislation for improving education statewide.

In addition, Busch also backed the overrides of three Ehrlich vetoes, the first such move by the Maryland General Assembly in 15 years.

The party-line votes affected measures that would set energy-efficient standards for appliances sold in Maryland, restore pension funds lost by state employees in the Baltimore City Office of Child Support Enforcement when it was privatized, as well prevent places that sell alcohol from opening within 300 feet of churches and schools in South Baltimore.

You want public ownership of slots emporiums in Maryland managed by companies that receive one license based on competitive bidding. Why?

I'm not a proponent of slots to start with, but I think that if you're going in the direction of expanding gaming to where it's going to be a primary revenue source for your budget, then you have to be very careful to control any expansion of that gaming.

How?

You might model it after what's being done in Ontario, Canada, and what they're trying to do in New York: The actual construction of the facilities is done by the state -- and your lottery commission or gaming commission would lease and own all the machines through a central computer and would have the first take of the money.

Then, you would have competitive bidding for managing those facilities. You would have professionals come in and sign a long-term agreement to manage them.

Why?

That does a couple of things: It puts the state in control. If you don't have a vendor who performs to your expectations, you can go out and get another vendor.

Another thing we found out during the debate last year was that the Maryland Stadium Authority can borrow money at a much lower rate than the track owners. The owners are going to have to pay 12 percent to 14 percent to borrow their money [for construction or improvements], whereas the authority could do it for 5 percent.

The stadium authority would have taken on long-term bonds that would've been paid back from the revenues from the facilities. Those costs would be figured into the payouts once the facilities were up and operating.

With the three locations proposed last year, the state could have saved a total of $45 million a year -- and that's a tremendous savings. That money could have gone to roads, schools or something else.

The greatest amount of control and profitability comes from the state building and owning the slots facilities -- and contracting out to someone who would operate them.

Governor Ehrlich has reintroduced his proposal for legalized slot machines this General Assembly session. It's been revised to include terminals at two non-racetrack locations. He estimates that slots revenue will total $900 million a year by 2007. Does this seem like a reasonable proposal to you?

The projections are inflated, yes. Delaware's never made more than $185 million a year. West Virginia's never made more than $280 million. To have that kind of a quantum leap to $900 million means that Marylanders would have to gamble something like $20 billion -- now a lot of that is churned money, or money you would bet again -- but $20 billion coming through machines is a lot of money. I think $900 million is a real stretch in my mind.

But the Maryland Department of Legislative Services has a lower estimate, of $734 million a year?

That's an optimistic point of view, even the DLS figure. I don't know how Maryland is going to generate that kind of money.

Why?

There's a definitive number of people who are going to participate in slots. Some of the polls show that 56 percent of the people are fine with slots, but 75 percent of them say they will never participate -- and 80 percent of them do not want them near their homes.

To project that kind of money is a wee bit optimistic. Plus, now we're receiving feedback from the Department of Legislative Services that we could lose up to 15 percent of our lottery revenues because of slots, which is about $60 million a year.

But the lost lottery revenue is to be expected, right?

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