Slots threaten deficit plan

House, Senate Republicans withdraw their support, leaving O'Malley's proposal on potentially shaky ground

Gazette Newspaper

by Alan Brody | Staff Writer

ANNAPOLIS - The seams on Gov. Martin O'Malley's carefully constructed deficit-busting proposal may be starting to tear even before lawmakers are called to Annapolis for a widely presumed special session this fall.

The issue of slot machines, as it has been in years past, remains divisive and is shaping up to be O'Malley's biggest obstacle in winning the legislature's support.

House and Senate Republicans this week backed off their support of expanded gambling, with the 14-member Senate GOP caucus pulling all of its votes for slots during a special session. House GOP leaders indicated their support should not be presupposed, which could doom passage of a slots plan similar to a 2005 bill that narrowly passed the chamber thanks to large Republican backing.

‘‘It's going to be very, very difficult," said House Majority Leader Kumar P. Barve (D-Dist. 17) of Gaithersburg. Democrats have not yet done a whip count, but Barve believes support for slots is ‘‘well short of 71 votes," the minimum total needed. ‘‘It's hard to know how the governor can sweeten the pot to get himself up to 71 votes in the House."

The 2005 House bill, which would have placed 9,500 machines at four non-racetrack locations, received support from 35 of the chamber's 43 Republicans at the time. Only 26 of the 36 Democrats who backed the bill remain in the House, meaning O'Malley has to secure 45 more votes.

‘‘I think we're a long way from getting slots done," said Del. Steven J. DeBoy Sr. (D-Dist. 12A) of Arbutus. ‘‘Without it, there's certainly not an appetite for [more] tax increases and it would be difficult for other conservative to moderate Democrats to go the same way."

One unknown is the posture of 38 House freshmen who have never cast a slots vote.

‘‘I don't think any of us are running to Annapolis ready to vote yea or nay," said first-term Del. Nicholaus R. Kipke (R-Dist. 31) of Pasadena, who is likely to favor slots, despite his caucus' cooled support. ‘‘... I just can't sleep at night knowing that our dollars are being used for vital projects in other states."

Regardless of how many Republicans back expanded gambling, O'Malley will have to sell his plan to some skeptical and undecided Democrats, House Speaker Michael E. Busch said.

‘‘It's a whole new dynamic and in essence you're starting over," said Busch (D-Dist. 30) of Annapolis.

In the Senate, where slots have enjoyed greater support, the GOP's defection complicates political calculations.

Senate Democrats are ‘‘fairly unified in support of the governor's plan," said President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach.

O'Malley has the 24 votes he needs in the Senate on his proposed tax hikes and spending cuts, Miller said, but slots is another matter, even if all three are contingent on each other to resolve the deficit.

‘‘Slots [revenue] is two to three years away," he said. ‘‘You need a commitment on slots to start now and you need revenues and cuts. But the governor's plan to get a special legislative session involves all three."

Why the rush, Republicans asked, when O'Malley deferred the opportunity to address the deficit during this year's regular legislative session.

‘‘While he was asking for a pass, the citizens of Maryland were paying the bill," said Senate Minority Whip Allan H. Kittleman (R-Dist. 9) of West Friendship at a news conference Wednesday.

And if slots revenue won't be generated immediately, what's the need to address it in a special session, asked Senate Minority Leader David R. Brinkley (R-Dist. 4) of New Market.

‘‘It does not need to be on the quick boat off the dock," he said.

House Minority Whip Christopher B. Shank (R-Dist. 2B) of Hagerstown agreed that a special session ‘‘is not the appropriate venue to consider such a weighty proposal."

But aides to O'Malley say waiting until the General Assembly convenes in January to tackle the fiscal predicament would swell the deficit to $2.2 billion.

The GOP tactic of opposing a special session produces conflict when lawmakers should be working to build consensus, O'Malley said on Thursday.

‘‘Over the next couple of weeks, any group of 10 or 20 people will get together and figure out if they can keep anything from happening, as if that should be a revelation," he told reporters at Embassy Day in North Bethesda. ‘‘The last four years in Annapolis have unfortunately proven to the people in Maryland that Annapolis is really good at not getting anything done, but blaming everybody else. What we need to do now is find consensus to solve problems."

Without GOP support, O'Malley has little room for error on slots in the Senate. Only 19 Democrats voted for the 2005 bill and several of the chamber's 33 Democrats are adamantly opposed to expanded gambling.

‘‘I think that's an extraordinarily difficult lift," said Senate Judicial Proceedings Chairman Brian E. Frosh, who is against slots.

Slots foes seized on the GOP announcements, holding news conferences in Baltimore and Silver Spring on Thursday to continue their drive to block expanded gaming.

‘‘The momentum is now with us," said Comptroller Peter V.R. Franchot (D), a leading anti-slots voice. ‘‘Two weeks ago, conventional wisdom said slots were a done deal. Conventional wisdom was wrong."

Slots have no chance in the House without GOP support, said Del. Curtis S. Anderson (D-Dist. 43) of Baltimore.

But that would mean O'Malley's plan lacks enough revenue to resolve the deficit.

‘‘It means more cuts, simple as that," Miller said.

Other legislators are pushing for alternate approaches. Frosh (D-Dist. 16) of Bethesda floated a corporate alternative minimum tax or a value-added tax, but acknowledged the difficulty in such an effort at this point.

Reversing the 1997 income tax cut has drawn interest from numerous lawmakers, said Del. Luiz R.S. Simmons, who pitched the idea several weeks ago in a letter to the Department of Legislative Services.

Budget analysts estimate it would generate $588 million in the first year and the top 1 percent of earners would bear 12 percent of the extra cost. That, said Simmons (D-Dist. 17) of Rockville, is a far more progressive way of filling the budget gap, than handing a hefty percentage of slots revenues to racetrack owners and the thoroughbred industry.

With slots, O'Malley's proposal is close to crumbling, Simmons said. ‘‘I think that it is on the precipice, and all it needs is a slight push."

But Del. Murray D. Levy (D-Dist. 28) of La Plata believes that while it may have some flaws, his party will make compromises and unite behind O'Malley's plan.

‘‘When push comes to shove, a lot of the absolutes stop becoming absolute. They become relative to something else that is more repugnant," he said. ‘‘There are 101 Democrats in the House of Delegates and all of us want this man to succeed and this is the first step toward making that happen."