Q&A with Maryland House Speaker Michael E. Busch

Speaker of the House Michael E. Busch would not say whether he would allow a vote on Gov. Robert L. Ehrlich Jr.'s slots proposal this session. 'We haven't seen the bill ... yet.'
As the speaker in the Maryland House of Delegates, Michael E. Busch continues to be the most visible opponent to Gov. Robert L. Ehrlich Jr.'s proposal to legalize slot machines around the state.

Legislation passed in the Maryland Senate last year, but Busch, an Anne Arundel County Democrat, refused to allow a debate on the issue on the House floor.

While Ehrlich, a Republican, revised his proposal this year to include terminals at two non-racetrack locations, Busch remains adamant against the plan and said the state should build and own the gambling dens.

The governor's $23.8 billion proposed budget for fiscal 2005 also is a sore spot with Busch because of its extensive use of short-term revenue items as well as for the financing issues surrounding the Thornton Commission legislation for improving education statewide.

In addition, Busch also backed the overrides of three Ehrlich vetoes, the first such move by the Maryland General Assembly in 15 years.

The party-line votes affected measures that would set energy-efficient standards for appliances sold in Maryland, restore pension funds lost by state employees in the Baltimore City Office of Child Support Enforcement when it was privatized, as well prevent places that sell alcohol from opening within 300 feet of churches and schools in South Baltimore.

You want public ownership of slots emporiums in Maryland managed by companies that receive one license based on competitive bidding. Why?

I'm not a proponent of slots to start with, but I think that if you're going in the direction of expanding gaming to where it's going to be a primary revenue source for your budget, then you have to be very careful to control any expansion of that gaming.


You might model it after what's being done in Ontario, Canada, and what they're trying to do in New York: The actual construction of the facilities is done by the state -- and your lottery commission or gaming commission would lease and own all the machines through a central computer and would have the first take of the money.

Then, you would have competitive bidding for managing those facilities. You would have professionals come in and sign a long-term agreement to manage them.


That does a couple of things: It puts the state in control. If you don't have a vendor who performs to your expectations, you can go out and get another vendor.

Another thing we found out during the debate last year was that the Maryland Stadium Authority can borrow money at a much lower rate than the track owners. The owners are going to have to pay 12 percent to 14 percent to borrow their money [for construction or improvements], whereas the authority could do it for 5 percent.

The stadium authority would have taken on long-term bonds that would've been paid back from the revenues from the facilities. Those costs would be figured into the payouts once the facilities were up and operating.

With the three locations proposed last year, the state could have saved a total of $45 million a year -- and that's a tremendous savings. That money could have gone to roads, schools or something else.

The greatest amount of control and profitability comes from the state building and owning the slots facilities -- and contracting out to someone who would operate them.

Governor Ehrlich has reintroduced his proposal for legalized slot machines this General Assembly session. It's been revised to include terminals at two non-racetrack locations. He estimates that slots revenue will total $900 million a year by 2007. Does this seem like a reasonable proposal to you?

The projections are inflated, yes. Delaware's never made more than $185 million a year. West Virginia's never made more than $280 million. To have that kind of a quantum leap to $900 million means that Marylanders would have to gamble something like $20 billion -- now a lot of that is churned money, or money you would bet again -- but $20 billion coming through machines is a lot of money. I think $900 million is a real stretch in my mind.

But the Maryland Department of Legislative Services has a lower estimate, of $734 million a year?

That's an optimistic point of view, even the DLS figure. I don't know how Maryland is going to generate that kind of money.


There's a definitive number of people who are going to participate in slots. Some of the polls show that 56 percent of the people are fine with slots, but 75 percent of them say they will never participate -- and 80 percent of them do not want them near their homes.

To project that kind of money is a wee bit optimistic. Plus, now we're receiving feedback from the Department of Legislative Services that we could lose up to 15 percent of our lottery revenues because of slots, which is about $60 million a year.

But the lost lottery revenue is to be expected, right?

There are trade-offs in this. But what I hate to see is that this becomes a foundation for our budget structure. What's going to happen is that once you've built these [emporiums] in different areas of the state, then people are going to try to expand them every time you run into a budget shortfall.

That is only natural, Mr. Speaker?

There is only a definitive amount of money that can be gambled, and there's a downside to it: It's going to have a detrimental effect to some of the entertainment establishments -- the mom-and-pop bars, restaurants -- because these facilities become the Wal-Mart of entertainment. Some of the smaller bars and restaurants are going to suffer because the drinks are going to be cheaper, the entertainment's going to be better -- and those [smaller] facilities are going to pay a price for it. That's been commonplace around the country where gaming establishments have been built in the community.

What problems do you have with the governor's proposal itself?

The proposal, which we haven't seen from the Senate yet, has the idea that these need to be exclusively at racetracks. I don't think that's the case. That's not proven to be the case anywhere else.


Racing has to do something to show that it can be self-sufficient and give some direction of where it's going. In none of these other areas [Delaware, West Virginia], has the racing industry given any indication of self-sufficiency or of trying to expand its fan base. That hasn't happened in Delaware or West Virginia.

My estimation is that if Maryland comes on line with expanded gaming facilities, West Virginia and Delaware would either shorten their racing days or stop underwriting the purses, because they are going to be more concerned with their profit share -- and the state is going to be more concerned about its revenues.

What racing needs is a state-of-the-art venue for those people who really enjoy it, want to go to an upscale facility to see horse racing.

... And those owners should build it?

I don't mind supplementing until it becomes a competitive, level playing field. I believe that as soon as Maryland expands gaming, Delaware and West Virginia are going to stop underwriting the horse-racing industry.


Delaware has no history of horse racing or breeding. They're importing their horses now; they're still Maryland-bred horses that are only going there for higher purses. But when it all of a sudden becomes Delaware competing against Maryland, they're going to be worried about how to cut costs -- and they're going to cut purses, in my estimation.

Is Governor Ehrlich's revised plan a better one?

I don't know if it's better. What you have to do is come up with some fundamentals: Fundamentally, you're trying to make [slots] as profitable as you can. You're trying to give the state as much control as you possibly can. You want to have as many consumer protections involved. You want to have the least amount of impact directly on the community. These are the kind of guidelines you ought to follow.

The governor told that he revised his proposal as an accommodation to some of your concerns.

That's the farthest thing from the truth. He's never had any discussions with me on this. The data we got back last year shows that there's very little correlation between those who participate in gaming and those who wager on horses -- and I don't think necessarily that the racetrack locations are the best locations.

But now, the proposal includes two non-racetrack locations?

Sure, but I don't think you have to have them at racetracks. You can have five facilities without having them at racetracks.

You make an appropriation to racing, hold them accountable until you find out what other states do and make the cuts appropriately. Somewhere along the line, racing has to stand on its own.

So, you don't consider the revised proposal an olive branch?

Look, I don't like slots to start with [chuckle]. It's not an accommodation to me. The governor and his administration have come to the realization that there's more profit to be made in [the non-racetrack locations].

Governor Ehrlich has described the slots matter as "déjà vu all over again." Do you agree?

This is not my initiative. The governor suggested last year that he would not re-enter this. He and the President of the Senate [Thomas V. Mike Miller Jr., D-Calvert] have taken it up again. They're in the midst of working up legislation in the Senate.

The budget is not predicated on any type of revenue passing this year. We have a balanced budget right now, so it does not have the importance it had last year.

But even though you're going to run into a projected shortfall next year, even if you pass a slots bill, it will not address a revenue shortfall next year. Optimistically, it will take 18 months to 24 months to get these emporiums up and running. It's not like you're going to get any immediate money from them unless you get some kind of upfront licensing fee.

This isn't a big concern of yours this session?

I'm trying to concentrate on other things, quite candidly. We've done a pretty in-depth study. I think the House knows where we are. We're trying to look at our primary issues: How to fund education, the budget.

I think most of the polling in the state shows that most of the people are concerned about the budget, most of the people are concerned about education -- and somewhere on the bottom, they're concerned about slots. Slots, for the vast majority of people, is not a high-priority issue.

But there are surveys showing that 52 percent of Marylanders want slots.

The interesting thing about the surveys is that people want slots [as opposed to] taxes, and people want slots that aren't in their community [chuckle]. Once you start talking about putting slots in somebody's community, it changes the whole dynamic of the debate. We found that out with Timonium.

Everybody in Baltimore County wanted slots at Pimlico and Laurel, but once you started talking about putting them in Timonium, you became the anti-Christ. It was like, "You can't put them here, because this is a family community," even though it was, theoretically, a better location.

You've been criticized as an obstructionist on the slots issue. Is that fair?

It's a poor commentary that someone else is going to blame someone for their own shortcomings because they have a legitimate concern about an issue. That doesn't make any sense.

I would like to think that the public of Maryland would like to think that there are legitimate sides to different issues. Then, you have a mature dialogue on the issue. When they didn't get their way, they stooped to an area that was below a certain maturity level. I think that reflected more poorly on them than anyone else.

Will you allow a debate on the House floor on slots this session, Mr. Speaker?

We haven't seen the bill come over from the Senate yet. Remember, they only had 25 votes last year. I don't know if the Senate is as strong about it as it was last year. You had a lot of momentum, new governor and everything. This year, the whole dynamic of two locations that aren't track-related puts a new dynamic into it.

I do think the bloom is off the rose, if you will, as far as people understanding that this is going to be a long-term revenue source and that these facilities will be coming to their neighborhood soon. Every time you have a shortfall now, somebody's going to be looking for someplace to expand a gaming facility.

Turning to Governor Ehrlich's proposed $23.8 billion budget, he told that many of the 15 revenue assumptions needed to be approved by the General Assembly are "minuscule." Do you think so?

Well, 15 revenue assumptions -- I'm hopeful that he can carry his party on these minuscule revenue assumptions, and we'll see pretty soon. Some of them I agree with. Some of them I don't.

We're going to try to be supportive of the governor where we can. Our ultimate goal is to try to do what is in the best interest of Maryland citizens, and the governor has put forth these issues for debate.

Still, at the end of the day, you're going to have all these different fees and surcharges add up to more than what a comprehensive solution to the budget would be.

You are concerned that the governor has put forth no long-term revenue items in the budget proposal?

Right now, we want to find a comprehensive solution to the budget. That's what we should be trying to do. Virginia, which is more conservative than us, is trying to do that right now -- and I think that's the kind of debate we should be having.

What are some of your other concerns about the budget proposal?

One of the things we have to get off the dime on is to determine whether we're going to fully fund Thornton, whether we're going to stretch it out -- and that direction has to come from the governor. The governor has to determine whether he is going to fully fund it in the next three years, or whether he's going to ask the General Assembly to stretch it out -- whether he is going to try to make some kind of cutback. That has to come from him.

Anything else, Mr. Speaker?

[Ehrlich] has to come to grips with how is he going to fund [Thornton], how he's going to fund higher education. He has laid out a transportation plan, but I would suggest that most people would like to see a solution to the education and the general fund budget issues before they start seeing a solution to the transportation budget.

It seems, in some respects, that we're going backward in our priority list, but we're willing to work with the governor in any way he wants.

Does it seem irresponsible of the General Assembly to pass the Thornton legislation without a way to pay for it?

Well, for better or worse, I'll take partial responsibility for that. We were under the impression that we'd fund the first two years, then come back and take a look at it.

But Thornton was going to come sooner or later, because it emanated out of a lawsuit from Baltimore City. The judge basically said we were underfunding Baltimore City schools, and his aptitude was that he was going to favor Baltimore City, and that if other jurisdictions joined in a lawsuit, then the court system would be allocating the money instead for the school system rather than the policymakers of the state. Sooner or later, you would have to deal with the issue of the inadequate and inequitable funding of education.

Then, you have the No Child Left Behind Act, which is also more prescriptive in its mandates for education: You have to have a highly qualified teacher in every subject matter by 2006, for instance; currently, one-third of the teachers in Baltimore City aren't certified in the field they're teaching. These all require resources.

While No Child Left Behind is very admirable, it didn't come with any money, either [chuckle]. So, there's enough irresponsibility to go around between the federal government and the state government.

Many of your colleagues recently introduced legislation to provide health insurance for many Marylanders who do not have it. Does the bill have the chance of passing this session?

Unless there's a revenue source identified, it's going to have a tough time. You have to have a revenue source to go with it. Medicaid's increasing at 10 percent a year; our budget's increasing 5 percent a year.

Seventy Maryland legislators are backing a bill to bar 45 assault weapons when the federal ban expires later this year? Are you a supporter?

No. I've supported gun control in the past. I believe here, as the Speaker, I'm the fair-broker here, so I want to see the dynamics that go on in the House and the Senate.

We cannot have the proliferation of those guns back in Maryland. The guns currently banned in Maryland should be banned. The ban would be the responsible way for Maryland to do it: pass it and then start to take a look at the issue.

This session, you co-sponsored Governor Ehrlich's legislative package, unlike last session. Are you getting soft, Mr. Speaker?

Well, I don't think I'm getting soft. I felt pretty strongly that, last year, you had a new governor, his leadership team was in place -- and that maybe it would be a better situation for the Minority Leader [George C. Edwards, R-Garrett] to put in the administration's bills.

This year, we had some discussion about it and thought it would be better for the presiding officer to do it. That's tradition, and I'll live by that tradition. I never looked at is as one big issue one way or the other.

In the first week of this year's session, the General Assembly overrode three of Mr. Ehrlich's vetoes, the first for a governor in 15 years. The partisanship was bold. Are the gloves off this session, Mr. Busch?

Obviously, there's a little more partisan tension than there's been in the past. In past years, we've brought bills out, put them on and special-ordered them until we've worked things out with the governor's office.

The vetos that were overridden were on issues that the governor gave no veto message that he had any philosophical changes in mind. Two of the bills were passed unanimously -- 141-to-0 [pension funds] and 140-to-0 [alcohol licensing].

So the question is, why did the 43 Republicans change their minds after they voted for the legislation the year before [chuckle]? Why would they do that?

The bills were passed by a strong majority -- and, quite candidly, when we looked at [the vetos] originally, I never looked at them as a partisan issue or as some kind of an affront to the governor. I looked at it as there was a difference of opinion, and this was the Legislature's job to look and see if there was any common ground between the governor and the General Assembly; didn't seem to be any, so we worked with the Senate to override three vetoes. It's not a big issue to me.

It seemed like a slap in the face to the governor...

I don't think it is any more a slap in the face than when the Legislature votes for a bill 141-to-0 and the governor vetoes it. Wouldn't you consider it a slap in the face?