Gov. Robert L. Ehrlich Jr. and top administration officials told a key House committee yesterday that they are willing to bend on virtually every aspect of their gambling plan except the one that might be most crucial to House Democratic leaders: increasing taxes.
Pressed by the committee - which killed the administration's slots plan last year - the governor and Budget Secretary James C. "Chip" DiPaula Jr. said they're open to a new "super-track" for horse racing in downtown Baltimore.
They said they'll negotiate state ownership of slots dens, an idea advocated by House Speaker Michael E. Busch that cuts out the owners of Maryland racetracks.
They even said they're open to pulling Prince George's County off the list of jurisdictions eligible for gambling facilities, which the county executive and some delegates representing the area have said they want.
But Ehrlich repeatedly said - to the committee and to a lunchtime pro-slots rally outside the State House - that he will not bend on significant tax increases, promising deep cuts in everything but public schools if the House rejects expanded gambling.
"Taxes are a non-starter," the governor told reporters. "The way to kill the slots bill again is to attach it to taxes."
The administration's unwillingness to bend on taxes could doom Ehrlich's slots plan, warned Del. Sheila E. Hixson, a Montgomery County Democrat and chairwoman of the House Ways and Means Committee.
"You know the position of the House," Hixson told administration officials at the end of the almost two-hour hearing. "We see slots and revenues as a cooperative situation. We hope we'll have a dialogue with you."
Yesterday's hearing was the governor's last chance this year to make a formal pitch to the Ways and Means Committee for his plan to permit up to 15,500 slot machines at three racetracks and three non-track locations. The committee could vote on the bill by the end of this week, Hixson said.
Legislative analysts project that the plan would raise more than $800 million for the state when the machines are up and running. The administration pledges to dedicate that money to increases in education spending promised in 2002 legislation known as the Thornton plan.
"If slots is defeated, we will fund Thornton," Ehrlich said. "It is the other programs that will suffer."
House Democratic leaders prefer a $670 million-a-year net increase in taxes that their chamber passed last week, as well as a further $65 million corporate tax increase approved Monday as a way to limit college tuition increases.
Hixson and other House leaders are urging the governor and Senate leaders to agree to at least a portion of their tax plan, noting that even if slots gambling is approved, it will be two years before most gambling revenues start flowing to the state.
The chairwoman has also pledged that if slots are to be approved by the House, it will virtually rewrite the Senate proposal. For example, a six-month study of gambling by Hixson's committee questioned why slot machine licenses should go to racetrack owners, rather than free-standing facilities owned by the state.
Hoping to curb any momentum to put slots at places other than the tracks - and to counter the huge turnout of slots opponents at last week's House hearing on gambling - more than 250 supporters of the horse racing industry gathered in front of the State House.
With chants of "Slots at tracks," "Save our jobs" and "No new taxes" led by lobbyists for the owners of Pimlico Race Course and Laurel Park, the workers cheered as Ehrlich emphasized the importance of saving and revitalizing Maryland's "historic racing industry." Almost a dozen horse transport trucks circled the legislative buildings, sporting banners with such slogans as "Grow Horses, Not Houses in Pastures."
"I just don't know why we've gotten to this point," said Kevin Witte, a jockey agent at Pimlico and Laurel who attended the rally. "It seems natural to piggyback slots onto horse racing to save the industry and the jobs."
Ehrlich and other slots supporters argue that a majority favor legalizing slot machines in Maryland, noting that two - and soon three - neighboring states have them at racetracks.
A poll released today by Gonzales Research & Marketing Strategies of Annapolis confirmed that 54 percent of Marylanders back legalizing slots, virtually unchanged from an October survey. The poll surveyed 825 registered voters, with a margin of error of plus or minus 3.5 percentage points.
The poll also asked whether Marylanders prefer that the General Assembly decide the slots question before adjourning in April or whether the question should be sent to referendum in the November election.
Four out of five registered voters support deciding the issue at referendum. During his 2002 gubernatorial campaign, Ehrlich said he would allow voters in individual jurisdictions to "opt out" of expanded gambling.
But yesterday, in response to a push from Democratic Del. Bennett Bozman of the Eastern Shore to allow voters to decide on slots, the governor firmly rejected a referendum.
"I believe you earn your salary by making difficult decisions," Ehrlich said. "I think it's a poor precedent when the representative body of the people passes the ball on a difficult decision."
In many other areas, Ehrlich and other administration officials showed far more flexibility.
For example, two Democratic Prince George's delegates, Justin D. Ross and Carolyn J.B. Howard, asked about pulling their county from the slots plan.
Several other counties were removed during the Senate debate after lawmakers representing those areas objected, leaving just Baltimore City and Prince George's and Cecil counties as potential sites for free-standing slots dens.
"The governor has said if Prince George's doesn't want to be in, the bill could go on," said Business and Economic Development Secretary Aris Melissaratos. Still, he said Prince George's is seen as a particularly lucrative site because "it's a gateway to Maryland" and would attract gambling dollars from Virginia and Washington.
Hixson asked DiPaula whether the administration would be willing to consider having the Maryland Stadium Authority build a "state of the art" racetrack facility with slots in downtown Baltimore.
"The governor would be happy to have those conversations," DiPaula responded. "If legislators, the mayor and others want to pursue the option, he'd be delighted to pursue that option."
But Paul Micucci, executive vice president of Magna Entertainment Corp., majority owner of Pimlico and Laurel, questioned whether such a track would be practical.
"It's an intriguing idea, but Pimlico is known the world over, so why would anyone want to build another racetrack?" Micucci said. "It costs a lot of money to build a racetrack and would take 150 acres and require a three- to five-year time frame. It just seems unrealistic at this point in time."
DiPaula also said the governor has "a willingness" to discuss state ownership of slots facilities, though the administration prefers at least some involvement of the tracks to ensure support for the racing industry.
Sun staff writer Greg Garland contributed to this article.
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