A simple, honest version of the slots referendum

August 27, 2008|By JAY HANCOCK | JAY HANCOCK,jay.hancock@baltsun.com

Supporters and opponents of Maryland slot machines are arguing over the wording of a slots-approval measure on November's ballot. The language goes on and on about education but says nothing about horse racing. Here's how an honest version would read:

This measure authorizes the state to issue up to five video lottery licenses for the purpose of raising revenue for education, bailing out an industry that can't make it on its own and saving Annapolis pols from the hard work of governing.

Revenue for education is part of the story - the way Plymouth Rock is part of Massachusetts. Big profit chunks will go to slot parlors and rich horse owners. Out-of-state horse owners, many of them.

It's true that schools will get half the loot, giving them at least a temporary boost. But there is nothing preventing Annapolis from eventually cutting other education funding, which would reverse the slots boost.

How much Maryland Lottery money ever got spent on schools? What portion of the tobacco settlement finally went toward anti-smoking campaigns? Revenue earmarks tend to get torn off in the romper room that is Annapolis.

And the money isn't as much as you might think. Slots losers are expected to leave a billion dollars or so at the parlors every year, an enormous amount. (Annapolis projects more, but we're rounding.) But that's before you subtract the cost of expanding Maryland's socially regressive gambling empire.

About $333 million of the spoils will go to slots-parlor operators. Somebody has to pay those pro-slots lobbying bills!

Another $70 million will be added to Maryland's corporate welfare pool. Seventy million is more than twice the size of the Maryland Economic Development Assistance Fund for aiding business.

But rather than creating steelmaking jobs or financing new biotech companies, the slots money will subsidize horse breeders and a few run-down racetracks. A primary beneficiary will be Frank Stronach's Magna Entertainment, owner of Pimlico Race Course and Laurel Park and loser of more than $400 million in the last six years, according to a piece in The Baltimore Sun by Hanah Cho.

In other words, the new gambling operation will subsidize the old gambling operation. Someday, in 2030 or so, maybe there'll be a Maryland referendum on legalized prostitution for the purpose of saving Maryland's historic slot machine industry. (And the schools!)

The Maryland Lottery will rake off $20 million a year in administrative costs. Another $5 million will get diverted to rehabilitate the gambling addicts created by 15,000 new slot machines.

Then there are indirect expenses. By 2013 slots will be swiping more than $50 million a year from the Maryland Lottery, budget officials have calculated. Money blown on slots won't be there for mortgages, Christmas presents or restaurants, either.

That'll hurt economic growth and collection of other taxes.

Three years ago, Attorney General Joseph Curran, father-in-law of Gov. Martin O'Malley, who favors slots, issued a report saying Maryland slots would breed "violent crime, more crimes against property, more insurance fraud, more white collar crime, more juvenile crime, more drug- and alcohol-related crime, more domestic violence and child abuse, and more organized crime."

On the other hand, Maryland faces another big budget shortfall. If slots get rejected, we here in Annapolis might have to do what other state governments do when the economy slows down, which is roll up our sleeves and cut spending. Or maybe we'll raise taxes (again).

Maybe we'll raise your taxes. Maybe we'll downsize your government program.

The real story here isn't education but political expediency. Wouldn't it just be easier to not think too much about this and check the "Yes" box on slots? That way nobody gets hurt. Right?

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