Md. vs. Va.

March 18, 2004

MARYLAND IS a high-income, low-unemployment state that rakes in federal dollars. So is Virginia.

Maryland faces a big long-term budget deficit. So does Virginia.

Maryland's political leaders are at a stalemate over how to solve the problem. So are Virginia's.

But as usual, the two neighbors aren't in concert: Maryland leaders are arguing about legalizing slot machines to fill the budget hole; Virginia's are debating adding billions of dollars in new taxes over the next two years. Slots aren't on the table there.

That's right. Virginia, long held up by some Marylanders as a model of tax resistance, has been talking about raising both its state sales tax and its income tax on top earners. As detailed by Sun reporter David Nitkin, the contrasts with Maryland run deeper: Virginia Democratic Gov. Mark Warner proposed $1 billion in new taxes, but state Senate Republicans then came back with an even bigger tax package.

Right now, Virginia's total tax bite per $1,000 in personal income is just slightly less than Maryland's, according to the Tax Foundation. But of course Maryland Gov. Robert L. Ehrlich Jr. is clinging to his no-new-taxes promise - even to the point of refusing to restore $16 million in state taxes on snack foods. From their respective poles, both states can learn a lot from each other:

In Maryland, Mr. Ehrlich ought to take a look at Mr. Warner's still-high approval ratings. Perhaps adding 1 percent to the Maryland sales tax rate - as we've proposed - wouldn't be such a political liability, particularly as part of a comprehensive solution to funding the Thornton education plan. A Sun poll in January found state support for that.

In Virginia, political leaders - wary of going back 50 years when Maryland casinos lined the Potomac River border - ought to be on high alert. There's no drive for slots in Virginia right now, but just wait: If Maryland gets slots, this relentless industry will push south. Just as slots in West Virginia and Delaware led to claims that Maryland is losing too much money across its borders, Maryland slots would set up Virginia as the industry's next domino.

The slots bill just passed by the Maryland Senate doesn't just seek Marylanders' gambling dollars, but also bucks from Washington and Virginia. That, of course, is why there could be two slots parlors in Prince George's County, including one right on the Potomac at National Harbor.

Virginia beat back a move for legal gambling in the 1990s, and it hasn't come up since. "We're too smart for that," says a Northern Virginia Republican, Del. Robert G. Marshall, who last year sponsored a resolution that passed the Richmond House, 90-7, urging Maryland to keep gambling away from the Potomac.

This year, there has been no such resolution, but Virginia is still taking very seriously the slots threat from Maryland. In turn, Delegate Marshall, who sits on the Interstate Commission on the Potomac River Basin, has a threat for Maryland: "If Mr. Ehrlich puts slots in Maryland, it would poison the well on the other side of the river" - threatening the two states' cooperation on matters such as the Potomac and the Chesapeake Bay. Marylanders can add that to the long list of big costs entailed in legalizing slots.

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