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Ehrlich won't tie tax increase to delegates' passage of slots

By Howard Libit

Sun Staff

March 4, 2004

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Gov. Robert L. Ehrlich Jr. ruled out yesterday linking a major tax increase to House of Delegates passage of slot machine legislation, even if it means the failure for a second straight year of his effort to expand gambling in Maryland.

"If that's what the House wants, it's not an option," Ehrlich told reporters.

But Senate President Thomas V. Mike Miller -- Ehrlich's chief legislative ally on slots -- welcomed the possibility of the House assembling a broader revenue package that includes slots and other taxes.

"I think that's a very positive development," Miller said yesterday. "There's a need for additional revenues, and I'm glad to hear the House discussing the possibility of both slots and other taxes."

Last week, Miller shepherded the governor's heavily amended slots legislation through the Senate. The bill would permit up to 15,500 slot machines at six locations: three racetracks and three nontrack locations in Baltimore City, and Cecil and Prince George's counties.

Legislative analysts predict that the measure could raise more than $800 million a year for the state when all the machines are up and running, but Democratic leaders say that's not enough to meet all of Maryland's fiscal needs in such areas as public education and health care.

Del. Sheila E. Hixson, a Montgomery County Democrat and chairwoman of the House committee that oversees gambling legislation, said Tuesday that she does not expect a slots bill to be approved by her committee unless the governor agrees to a package of additional sources of revenue in excess of $500 million.

Hixson said she recognizes that Ehrlich has rejected an increase in the sales or the income tax but said she believes there are other tax measures that could be cobbled together.

Yesterday, Miller agreed with Hixson's comments, indicating that he is counting on the House to come up with additional sources of revenue that the governor might find acceptable.

"Everything is in play," Miller said. "There are a number of different fees and taxes that we can look at. The gas tax, the snack tax."

Ehrlich conceded that the administration is discussing some small revenue packages, mostly involving corporate loopholes, but said that nothing under negotiation would add up to anything close to $500 million.

Nevertheless, the governor said he believes slots stands a better chance than when it was defeated last year in a House committee.

House Speaker Michael E. Busch has said the House Ways and Means Committee will consider the slots legislation like any other bill.