House panel zeros in on slots

THE BALTIMORE SUN

Leaders of a key House of Delegates committee yesterday began to sketch the outlines of what might be their answer to the Senate's slots legislation, assuming that a deadlock over taxes between Democratic lawmakers and the governor can be broken in the next week.

While the House Ways and Means Committee plan remains a work in progress, participants in the meeting said there is support on the panel for opening the door to slots facilities virtually anywhere in the state, without giving racetracks any particular preference -- a radical departure from the bill the Senate approved in February.

One part of the Senate plan supported by the members was allowing 15,500 slot machines at six locations. But the lawmakers are seriously considering allowing slots facilities in any county or city in Maryland, leaving it up to a jurisdiction's residents to actively remove themselves from eligibility for expanded gambling, perhaps through a referendum.

The Senate restricted the facilities to a few jurisdictions.

"We'll strip the Senate bill out and begin work from there, based on the beliefs and desires of the majority leadership of the House that are also in support of slots," said Del. Clarence Davis, a Baltimore Democrat and chairman of the House subcommittee overseeing expanded gambling. "By Monday afternoon, my subcommittee will be working on a bill to present to the speaker of the House."

But Davis -- who also endorses Rep. Albert R. Wynn's effort to put full-scale casinos into the bill -- and other House leaders warn that a gambling proposal is unlikely to move forward unless the governor agrees to major revenue increases.

Private meetings yesterday between Democratic leaders and aides to Gov. Robert L. Ehrlich Jr. failed to resolve the stalemate over slots and taxes, though the leaders are expected to continue talking throughout the weekend.

And an effort by state Treasurer Nancy K. Kopp, Comptroller William Donald Schaefer and state Democratic Party Chairman Isiah Leggett to create cohesion among Democratic leaders also produced little movement. The three met for breakfast in Kopp's office with House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller, but the session seemed to produce little common ground.

Busch and Del. Sheila E. Hixson, chairwoman of the House Ways and Means Committee, have said they believe slots should be considered only if they are part of a broader solution to Maryland's projected revenue shortfalls. They have said they are flexible as to how the new revenues are raised, but said the amount must come to at least $500 million or $600 million.

Ehrlich has rejected any revenue increases that involve raising the sales tax or income tax. Miller has generally supported the call for new revenues, but insists that the House first needs to take action on the Senate slots bill.

Yesterday, Hixson suggested that expanding the 5 percent sales tax to cover a range of services could generate hundreds of millions of dollars in new revenue without amounting to a "sales tax increase."

"He's already talked about closing the corporate tax loophole," Hixson said. "Think of this like another loophole, a loophole in the sales tax. I would hope the governor could see it that way."

But Paul E. Schurick, an Ehrlich spokesman, rejected the idea. "It's an increase in the sales tax," Schurick said. "The governor opposes any increase in the sales tax. He didn't promise to oppose most increases. He promised to oppose all increases."

Ehrlich's slots proposal -- allowing 15,500 machines at three tracks and three nontrack locations -- is estimated to raise more than $800 million in state revenues. But it will likely take two years or more for all the machines to be in operation, leaving the state with a projected shortfall in the fiscal year beginning July 1, 2005.

Miller is trying to pressure the House Democratic leadership and Ehrlich to reach a compromise by refusing to appoint Senate negotiators on budget and tax bills, making it all but certain that the General Assembly won't approve a budget by its constitutional deadline Monday.

The governor will then be forced to issue a proclamation allowing the Assembly session to extend beyond the 90th day, or April 12, if lawmakers haven't approved a budget by then. Most legislators consider that unlikely, emphasizing that next year's spending plan is balanced and that the conflict over slots and taxes involves revenues for future budgets.

Nevertheless, the stalemate over the budget and taxes could begin to paralyze legislation moving through the House and Senate, as top lawmakers begin holding up the opposing chambers' bills to increase the tension. Amid the conflict, House Ways and Means Committee leaders are plunging ahead with rewriting the Senate's slots proposal, hoping that -- if an agreement is reached on other revenues -- they'll have a gambling plan ready.

Yesterday's lengthy slots meeting involved the subcommittee chairmen of the House committee, as well as the committee's chairwoman and vice chairwoman. Before the meeting, Hixson insisted that any House slots proposal would include aid to Maryland's horse industry, but gave few assurances to track owners. "There will be something for the horses," Hixson said.

Among the issues apparently left unresolved by committee leaders was what role, if any, the Maryland Stadium Authority might play in designing and building gambling facilities. Many lawmakers oppose taking on debt to finance the construction of state-owned gambling facilities, but others have argued it would be a better long-term financial deal for the state.

Sun staff writers Ivan Penn and Greg Garland contributed to this article.

The Senate plan

The House of Delegates has vowed to rewrite the slots legislation approved last month by the state Senate. The Senate bill would:

Allow 15,500 slot machines at six locations.

Require three of the locations to be chosen from among four racetrack sites: Pimlico Race Course in Baltimore, Laurel Park in Laurel, Rosecroft Raceway in Prince George's County, and a track to be built in Allegany County. Language in the bill gives strong preference to Allegany, Pimlico and Laurel.

Restrict the other locations to nontrack sites in Cecil and Prince George's counties and in Baltimore that would be chosen by a commission.

Dedicate the state's portion of slots revenue to education.

Assembly action

HELMETS: The Senate Judicial Proceedings Committee voted 7-4 for a bill that virtually does away with the state's requirement that motorcycle drivers and passengers wear safety headgear. The bill exempts anyone over 21 who has been licensed to operate a motorcycle for two years or who has taken an approved motorcycle safety course, as well as any operators or passengers of three-wheeled motorcycles with an enclosed cab.

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