Schmoke proposes 10c surcharge on lottery tickets Idea is intended to raise money for the city; reception cool

Mayor Kurt L. Schmoke is considering several options for weathering Baltimore's fiscal crisis, including seeking a 10-cent surcharge on state lottery tickets and reducing the city's $39 million-a-year contribution to the city employee retirement systems.

The city faces a $16.1 million budget gap for the fiscal year that begins in July.


Schmoke is proposing that a dime be added to the price of lottery tickets sold in the city for one year. The added revenue from the lottery surcharge, estimated at $19 million, would be used for law enforcement.

The money would be targeted to increase patrols, youth clubs and police cadet programs and to upgrade laboratories crime-fighting technology, Schmoke said.


A disproportionate share of lottery revenue -- $192 million a year -- is generated in Baltimore, home of most of Maryland's poor. Lottery revenue goes directly to the state.

Schmoke said the lottery proposal, which would require legislative approval, has gotten mixed reaction from the city's legislative delegation.

Legislative leaders, however, all but rejected the idea. But they said it could lead to talks about other ways to help the city through its fiscal crisis.

Senate President Thomas V. Mike Miller Jr., for one, said he learned of Schmoke's plan only last night.

"I don't think it will be looked on with much favor here," said Miller, D-Prince George's. "I think we're a day late and a dollar short with that proposal."

He indicated, however, that he is sympathetic to the city's fiscal plight: "Most people believe the budget comes up a little short in terms of helping Baltimore City."

Miller said he and the city's senators are working out a deal that would allow the city to keep as much as $20 million of its $38 million in police aid, while having the state take over the cost of operating the City Jail. Gov. William Donald Schaefer had proposed trading all the police aid for the jail takeover.

Miller said he was scheduled to meet with Schmoke and city legislators today to talk about the idea.


House Speaker R. Clayton Mitchell Jr., D-Eastern Shore, said he was surprised to hear about the lottery proposal. "I think it would be awfully hard to sell this in a month's time," he said.

Finance Director William R. Brown Jr. has been working on a plan that would allow the city to reduce its contributions to the pension funds, which have combined assets of $1.5 billion.

"Any reduction would have to do with what the investment return projections are in the retirement systems," said Edward J. Gallagher, city budget director.

Gallagher explained that the retirement fund assets are invested in a wide range of securities and that the city's contribution fluctuates with the performance of those investments. With good investment returns, for instance, the city's contribution can be reduced without hurting the size of the fund.

But any move to reduce the city's contribution to its retirement systems is likely to be protested by pension fund trustees. Last year, the trustees pressured Schmoke to drop a plan to tap the funds for $102,318 in operating expenses.

Schmoke's proposals come after the legislature last weekend officially shelved the Linowes Commission plan, which would have raised an additional $800 million in state revenues a year.