April 09, 2004

AS THE slots-taxes standoff reaches a head in Annapolis, it's hard to envision slots gaining approval this year. With just four days left in this legislative session, Gov. Robert L. Ehrlich Jr. and House Speaker Michael E. Busch once again met to bridge their considerable differences over taxes last night; a midnight accord remained a possibility, however distant.

But even then, slots itself has become a zero-sum game -- in which support for any plan is offset by the ire of competing interests. A slots bill may yet make it to the House floor, but it likely would call for state-owned parlors in Republican suburbs that want them elsewhere -- thus perhaps forcing some GOP delegates, who have been pushing for slots, to help kill it.

The real battle now seems to boil down to who will get blamed if the state's long-term structural budget deficit isn't solved this year. Our nominees: Mr. Ehrlich and state Senate President Thomas V. Mike Miller. Both have focused on solving only part of the fiscal problem -- via slots -- rather than a comprehensive solution as sought by Mr. Busch. The governor has not shown leadership, and Mr. Miller has shown he will go to the mat -- not for the state, but for his patrons.

Gov. Ehrlich may seem a big loser if his slots drive doesn't prevail for the second year in a row. But he may believe he's already won such a huge victory -- with House Democrats approving a $670 million tax increase that he then flatly rejected -- that slots is just icing. Maybe that's why players on all sides say the governor doesn't even seem to care about slots.

Trouble is, if that's the political victory, it's one in which the governor and all Marylanders quickly become big losers. Mr. Ehrlich's no-new-taxes stance means for the third straight year he will enter the next year's legislative session facing the need for big cuts -- $500 million worth -- toward balancing an $850 million hole in the fiscal 2006 state budget.

These cuts will hurt. They will come from such vital services as Medicaid and community colleges, and from shifting liabilities, like teacher pensions, to already-strapped local jurisdictions. Local property taxes almost certainly will go up across the state. That's the fallacy of the governor's no-tax pledge: Marylanders' tax load, including that of his strongest supporters in GOP suburbs, will rise anyway.

As for Mr. Miller, he's trying to cast himself as a diplomat mediating this face-off. That would be more convincing had he not taken the unusual step of holding up final work on the 2005 budget -- over which there are few differences -- as pressure for slots, particularly slots at racetracks. Remember: Mr. Miller remains the subject of an FBI inquiry into donations to a national political committee he leads from -- guess who? -- racetrack owner Joseph A. De Francis.

We're very pleased that slots' chances appear slim. Funding state government with slots would be a damaging public policy. Indeed, slots' first major cost to the state already is evident in Mr. Ehrlich's failure to address Maryland's deep fiscal problems.

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