House panel zeros in on slots

Committee outlines plan in response to Senate's proposal on gambling

A few radical differences

Stalemate with governor on raising taxes persists

General Assembly

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

Leaders of a key House of Delegates committee yesterday began to sketch the outlines of what might be their answer to the Senate's slots legislation, assuming that a deadlock over taxes between Democratic lawmakers and the governor can be broken in the next week.

While the House Ways and Means Committee plan remains a work in progress, participants in the meeting said there is support on the panel for opening the door to slots facilities virtually anywhere in the state, without giving racetracks any particular preference -- a radical departure from the bill the Senate approved in February.

One part of the Senate plan supported by the members was allowing 15,500 slot machines at six locations. But the lawmakers are seriously considering allowing slots facilities in any county or city in Maryland, leaving it up to a jurisdiction's residents to actively remove themselves from eligibility for expanded gambling, perhaps through a referendum.

The Senate restricted the facilities to a few jurisdictions.

"We'll strip the Senate bill out and begin work from there, based on the beliefs and desires of the majority leadership of the House that are also in support of slots," said Del. Clarence Davis, a Baltimore Democrat and chairman of the House subcommittee overseeing expanded gambling. "By Monday afternoon, my subcommittee will be working on a bill to present to the speaker of the House."

But Davis -- who also endorses Rep. Albert R. Wynn's effort to put full-scale casinos into the bill -- and other House leaders warn that a gambling proposal is unlikely to move forward unless the governor agrees to major revenue increases.

Private meetings yesterday between Democratic leaders and aides to Gov. Robert L. Ehrlich Jr. failed to resolve the stalemate over slots and taxes, though the leaders are expected to continue talking throughout the weekend.

And an effort by state Treasurer Nancy K. Kopp, Comptroller William Donald Schaefer and state Democratic Party Chairman Isiah Leggett to create cohesion among Democratic leaders also produced little movement. The three met for breakfast in Kopp's office with House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller, but the session seemed to produce little common ground.

Busch and Del. Sheila E. Hixson, chairwoman of the House Ways and Means Committee, have said they believe slots should be considered only if they are part of a broader solution to Maryland's projected revenue shortfalls. They have said they are flexible as to how the new revenues are raised, but said the amount must come to at least $500 million or $600 million.

Ehrlich has rejected any revenue increases that involve raising the sales tax or income tax. Miller has generally supported the call for new revenues, but insists that the House first needs to take action on the Senate slots bill.

Yesterday, Hixson suggested that expanding the 5 percent sales tax to cover a range of services could generate hundreds of millions of dollars in new revenue without amounting to a "sales tax increase."

"He's already talked about closing the corporate tax loophole," Hixson said. "Think of this like another loophole, a loophole in the sales tax. I would hope the governor could see it that way."

But Paul E. Schurick, an Ehrlich spokesman, rejected the idea. "It's an increase in the sales tax," Schurick said. "The governor opposes any increase in the sales tax. He didn't promise to oppose most increases. He promised to oppose all increases."

Ehrlich's slots proposal -- allowing 15,500 machines at three tracks and three nontrack locations -- is estimated to raise more than $800 million in state revenues. But it will likely take two years or more for all the machines to be in operation, leaving the state with a projected shortfall in the fiscal year beginning July 1, 2005.

Miller is trying to pressure the House Democratic leadership and Ehrlich to reach a compromise by refusing to appoint Senate negotiators on budget and tax bills, making it all but certain that the General Assembly won't approve a budget by its constitutional deadline Monday.

The governor will then be forced to issue a proclamation allowing the Assembly session to extend beyond the 90th day, or April 12, if lawmakers haven't approved a budget by then. Most legislators consider that unlikely, emphasizing that next year's spending plan is balanced and that the conflict over slots and taxes involves revenues for future budgets.

Nevertheless, the stalemate over the budget and taxes could begin to paralyze legislation moving through the House and Senate, as top lawmakers begin holding up the opposing chambers' bills to increase the tension. Amid the conflict, House Ways and Means Committee leaders are plunging ahead with rewriting the Senate's slots proposal, hoping that -- if an agreement is reached on other revenues -- they'll have a gambling plan ready.

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