Tax package sought before slots approval

Another revenue source needed, House panel says

Options sent to Ehrlich last month

The governor has called new levies `deal-breakers'

General Assembly

March 03, 2004|By Howard Libit | Howard Libit,SUN STAFF

The chairwoman of the House committee that oversees gambling said yesterday that she will not permit slots legislation to move forward unless Gov. Robert L. Ehrlich Jr. agrees to a tax package of at least $500 million - a demand that could prove insurmountable.

"Our position is that if there is going to be a slots bill, we want it to have another revenue source," said Del. Sheila E. Hixson, a Montgomery County Democrat and chairwoman of the House Ways and Means Committee. "We're not going to do slots unless we have taxes, too."

In a wide-ranging interview on slots, Hixson said she delivered a menu of tax options to the governor's staff more than three weeks ago, and "I'm still waiting to hear back from them on what they might accept."

But an Ehrlich adviser dismissed all talk of trying to tie a tax increase to slots. "If that's the House strategy, then we might as well call the whole thing off," said adviser Paul E. Schurick.

In the meantime, momentum continued to build yesterday among delegates who oppose slots to try to exclude their home jurisdictions from expanded gambling.

Prince George's County Executive Jack B. Johnson delivered a letter to his jurisdiction's delegates Monday night, saying he opposed making Prince George's a gambling destination and asking them to seek "local courtesy." House Speaker Michael E. Busch has said he hopes to defer to the wishes of the local lawmakers when it comes to deciding where slots facilities would be permitted.

The bill passed last week by the Senate is assigned to Hixson's committee. It permits 15,500 slot machines at six locations - three racetracks and three nontrack locations in Baltimore City and Cecil and Prince George's counties. Legislative analysts predict it would raise more than $800 million a year for the state when all of the machines are up and running.

Hixson predicted that if her committee approves legislation to expand gambling in Maryland, it would be "far different" from the measure passed last week by the Senate. She said the committee will not take up serious work on the Senate bill for at least three weeks, though she is having discussions about whether to hold a hearing before then.

Last year, the Senate also approved a slots proposal, but Hixson's committee defeated it 16-5 a few days before the end of the legislative session.

Hixson said yesterday that she thinks there are enough votes on her committee to support a slots proposal, but only if it is a part of a broader, more complete solution to Maryland's fiscal crisis. "Even if we pass slots, it's not enough to take care of everything we need," she said.

The slots revenues would cover about three-quarters of the amount needed to fulfill promised increases in education aid, and the state's obligations in areas such as health care for the poor, she said.

"We have about 20 bills with different taxes," Hixson said. "We know the governor has said no income tax or sales tax increases, but there are a list of other options that we think he can look at. The corporate tax loopholes, the luxury tax. It's up to him."

Hixson said she offered a two-year package of temporary taxes, to provide revenues until slot machines began operating, but the administration rejected it.

The governor repeatedly has said that increases in sales or income taxes are "deal-breakers" when it comes to slots legislation. "The governor has expressed a willingness to discuss minor fee issues and minor revenue enhancements, but not a tax increase," Schurick said.

Hixson's comments yesterday are her most expansive since last week's Senate vote. Though she has been a longtime slots supporter, Hixson's insistence yesterday on tying tax increases to expanded gambling indicates she is following the lead of the House speaker, who is reluctant to make slot machines a part of Maryland's fiscal solution.

Should the House move forward on gambling legislation, Hixson - whose committee spent the summer studying expanded gambling - said she expects the House to ensure that at least some of the slot machine facilities would be state-owned, hiring an outside company to run the operations.

The Senate's decision to concentrate many of the slots facilities in the two Maryland jurisdictions that are majority African-American also is troubling, Hixson said. It's likely that four of the six facilities would be put in Baltimore and Prince George's.

"That's a very big issue for the Black Caucus, and we'll be hearing more and more about it," Hixson said. "When I went home to my district this past weekend, people were asking me why all of the slot machines were going to Democratic areas, and none were going to Republican areas of the state."

That perception helped prompt Johnson, the Prince George's executive, to write the letter to his county's delegates.

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