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By Dan Genz
Capital News Service
Thursday, March 6, 2003

ANNAPOLIS - House Democrats blasted Gov. Robert Ehrlich Thursday for redrawing his slots plan to give racetracks a higher percentage than education, while supporters stood by their leader.

After racing interests told Ehrlich, his "splits didn't work," he returned to the drawing board, hired an outside consulting firm, and presented a plan Wednesday that transferred almost 20 percent of the take from education to the racetrack owners.

"We need a bill that will work, that all the stakeholders can agree with," Ehrlich said. "This plan works . . . and is essential to funding education."

But the stakeholders had too much say, said House Majority Leader Kumar Barve, D-Montgomery. "I do not see how it could pass."

"This is a much worse bill, and the other one didn't even work," he said.

Ehrlich's new version also increases the number of machines at Pimlico, Rosecroft and Laurel tracks to 3,500 apiece, slices license fees 60 percent and leaves a $230 million hole in the state budget the Legislature will have to fill with cuts and new revenue sources.

A fourth track under construction in Allegany County has the option to purchase a license for 1,000 slot machines. Lack of its license fees would put the state 66 percent behind the fee collections it contemplated in the 2004 budget.

The House has given up trying to pass a slots bill, said Ways and Means Committee Chairwoman Sheila Hixson, D-Montgomery. The House budget will replace the $400 million in slots revenue Ehrlich expected with dollars from loophole closings and cuts, she said.

The Senate will make passing the bill its top priority over the next two weeks, said longtime slots supporter President Thomas M. Mike Miller, D-Calvert.

There is not enough money for education and every new dollar is a dollar the state doesn't have, said both Miller and state schools Superintendent Nancy Grasmick.

Ehrlich's new proposal gives racetracks 43 percent, education 42 percent, administrative costs 5 percent, governments with gaming tracks 3.6 percent, purses 3.4 percent and gambling abuse programs 0.7 percent.

Slots opponents say the new bill gives track owners much more than they deserve, while taking away revenue from schools. "This is a great day for Maryland's school children," said StopSlotsMaryland lobbyist Minor Carter. Attacking the plan isn't fair, proponents say.

"This is still the best deal in the country," said Senate Budget and Taxation Chairman Ulysses Currie, D-Prince George's, noting Delaware's schools only get 38 percent of the take.

"There is no fat in the bill," said Thomas Bowman, spokesman for the horse industry. The Ehrlich administration already searched for places to cut and couldn't find them, he said. "They worked day and night to lower the track's portion and came up with a plan similar to what we presented in the first place."

The racetracks' portion is split in two parts. They receive 23 percent of every dollar the state collects to cover operating costs like electricity, advertising and paying employees.

The bill also gives the tracks 20 percent more toward their required $100 million in capital improvements, profits and reimbursement for license fees.

Ehrlich gave the tracks a flat 23 percent of the take in the previous bill, while education netted 61 percent and nothing was taken off the top for the track's operating expenses.

Jurisdictions with gaming tracks will get $54 million in the plan -- not enough for Prince George's Delegate Obie Patterson, chairman of the Legislative Black Caucus.

"That number has to be higher for my vote," he said.

The things people don't like in the bill aren't permanent, Currie said, calling this the first quarter of deliberations. Over the next two weeks, Currie's budget committee and Miller will look at possible changes to the bill.

Some lawmakers were still steaming Thursday at the way Ehrlich presented the bill late Wednesday evening.

Currie, who stood at Ehrlich's news conference in support of the retooled bill, was never briefed about its specific contents, particularly the reduction in education's take.

Shortly after the surprise, Currie reiterated his support for the plan and said it was a workable option. Others were less accepting of the changes. "I don't know what is more outrageous, the gift the industry got or that (the administration) didn't think anyone would find out," Barve said.

Ehrlich will now likely face a veto choice. Miller and House Democrats promised to fill the governor's $230 million budget gap with some tax measure, but Ehrlich has vowed to reject any sales, income, alcohol and tobacco taxes.
 

Copyright © 2003 University of Maryland Philip Merrill College of Journalism