Slots a budget hurdle

Proposed referendum on machines may end stalemate

October 14, 2007|By James Drew | James Drew,Sun reporter

As Gov. Martin O'Malley struggles to win support for his plan to erase a projected $1.7 billion shortfall in the state budget next year, the stalemate over legalizing slot machine gambling remains one of the biggest obstacles.

Legislators who favor slots face off against various factions that don't.

"You've got one contingent that believes that no tax increases are needed, and they have put through spending cuts," said Sen. E.J. Pipkin, an Eastern Shore Republican. "Then you have another contingent that says it should be done with tax increases, no budget cuts and no slots. And it's tough to build a consensus when you have those two extremes tugging at you every day."

But last week, the governor's aides said they saw a glimmer of hope as legislators reacted to O'Malley's comment that he would be open to letting the voters decide the fate of slots, possibly at the November 2008 general election.

"The General Assembly has not been able to move forward on this issue for the last five years. Maybe the best way to put it behind us is to let the people decide," said O'Malley spokesman Rick Abbruzzese.

O'Malley has scheduled a news conference tomorrow in Annapolis to announce the start date of a special session.

"The governor feels the cost of waiting is too great, and we need to move forward," Abbruzzese said.

On Sept 25, O'Malley announced he would push for slots as a way to help close the budget gap, help the state's struggling horse industry and preserve open space.

The governor said he would use as a model a slots bill that the House of Delegates passed in 2005 that called for 9,500 machines at four locations - one each in Anne Arundel, Harford, Frederick and Allegany counties. That would have allowed for slots at the Laurel Park racetrack in Anne Arundel but not at Pimlico in Baltimore.

Since then, the governor has not released details of his slots proposal. He has said he expects it will generate about $550 million a year by fiscal 2012.

Del. Maggie L. McIntosh, a Baltimore City Democrat who has voted against slots, said the landscape has shifted from a few years ago when Senate President Thomas V. Mike Miller and then-Gov. Robert L. Ehrlich Jr. pushed for slots, and House Speaker Michael E. Busch called for expanding the sales tax base and other progressive tax changes. Miller and Busch are Democrats; Ehrlich is a Republican.

"The slots debate is different in one respect now, and that is we have a second floor engaged in the process," said McIntosh, referring to the governor's office. "I do think the referendum is a healthy piece to look at."

Matthew A. Crenson, a Johns Hopkins University political science professor, said O'Malley is "waffling a little bit" with his stated openness toward a referendum.

"But the fact is, slots are not likely to have much of an immediate impact on the budget," Crenson said. "It is not going to generate revenue for at least a year, and there was a long delay after legalization in Pennsylvania. So he can put them on the back burner, and that gives him more flexibility than other parts of his tax plan."

The idea of a referendum is not new, and the last time it was floated, it ended in defeat for Ehrlich. In September 2004, Miller approached Ehrlich about resurrecting a plan for a referendum on slot machine gambling.

But efforts to put the issue on the November ballot collapsed as Busch and Ehrlich clashed over lining up the 85 votes needed in the House of Delegates to move forward.

Busch said Ehrlich didn't work hard enough to get votes and shut the door to negotiations, The Sun reported at the time. Ehrlich backers said the speaker didn't keep his word because he scrapped an effort to raise votes for the Labor Day plan in the face of internal House opposition and instead wanted to change the proposal.

But it could be a very different outcome for O'Malley, a Democrat, with Busch and Miller, said Crenson, the political science professor.

"Letting the voters decide gives the legislators a lot of cover on this issue. But the nature of this proposal is going to be absolutely critical. We have the number of machines. We have a couple of locations. There is flexibility there. There needs to be a lot more discussion on this issue," he said.

W. Minor Carter, a lobbyist for the group Stop Slots Maryland Now, said a referendum could limit the number of slot machines.

If gambling companies wanted more, they would have to return to the ballot, Carter said.

But he added that it's impossible to evaluate the proposal without details.

Carter said Stop Slots Maryland Now will back Del. Shane E. Pendergass' proposal to authorize a constitutional amendment with a double impact.

Under the plan offered by the Howard County Democrat, a slots referendum would have to gain majority support statewide to become law, and slot machines could be located only in jurisdictions where voters give majority support.

Pendergrass said her proposal "allows people a say in their own communities."

"If you are not willing to accept it in your own backyard - and I define that as your county - you would have to vote against it. I've always believed this is a big change for Maryland, and the citizens should have a voice in this," she said.

Julie Erickson, chairwoman of the Maryland Interfaith Legislative Committee, is among those who have tracked the governor's evolving stance on slots.

O'Malley previously said he supports "limited slots" at racetracks to save racing jobs, but in 2005 he called gambling a "pretty morally bankrupt" way to fund education and other priorities.

"He has been swayed that he will have strong Senate support if he does support slots, and it is too bad," said Erickson. "It is such a failed policy."

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