Good news for the budget means bad news for slot machines in Maryland, Gov. Robert L. Ehrlich Jr. conceded yesterday, acknowledging that flush state finances will sap the legislative will to act on his top priority.
During the 2002 campaign and his first years in office, the governor pushed for slots as the best way to balance the budget without raising taxes. Even last year, when state finances were improving, he sought to tie expanded gambling to school construction, a top fiscal priority of legislators.
But with a $1 billion surplus this year and another surplus expected next year, Ehrlich said fiscal need is no longer an effective stick to drive the issue. He said he believes slots will pass but not until the legislative session after the 2006 election.
"Clearly the fiscal reality of the time made slots a more attractive option" at the beginning of his term, Ehrlich said after releasing his $29.6 billion spending plan yesterday.
But the governor has not given up on slots. He said he expects pressure from neighboring states where they are legal - including Pennsylvania, where the machines are coming soon to racetracks - to make slots in Maryland inevitable.
"Pennsylvania's going to clean our clock," he said.
Ehrlich introduced slots bills in each of the past three years. His bills - or ones similar to them - have passed in the Senate but have stalled in the House. Last year, the House passed its own slots legislation, but it was rejected by the Senate when House leaders refused to negotiate the details, saying any changes would destroy their chamber's fragile compromise.
The governor has not said whether he will reintroduce slots legislation this year. He gave an unclear response during a news conference yesterday, saying, "We're actually putting in a bill this year - last year"; his aides were not available last night to elaborate.
House Speaker Michael E. Busch, the chief slots opponent in the legislature, said he doesn't expect a serious push for expanded gambling this year.
"It would be hard," Busch said. "Not only is this an election year, but the fact that you have the unemployment rate that you have and the surplus you have, I don't know how you make a case for slots."
Ehrlich tried to make the case at a news conference yesterday where he released his budget. Slots at racetracks would save the horse racing industry, he said, which in turn would prevent horse farms from being sold to developers - reducing sprawl and helping to protect the Chesapeake Bay. And more money wouldn't hurt, he said.
"Of course, we would have another billion or even two if we had passed slots in our first year, and that would make everything better," he said.
Maryland Jockey Club President Joseph A. De Francis said he hasn't talked to anyone in the administration or the legislature about slots this year, but he said an election year shouldn't stop anyone from taking up the issue. It has been thoroughly debated for the past three years, and the House and Senate could easily find middle ground, he said.
In the meantime, he said, the need for slots is greater than ever in the racing industry. Magna Entertainment Corp., which owns the Laurel and Pimlico racetracks, is in negotiations with the Maryland Racing Commission over a plan to cut racing dates this year. Also, slots in Pennsylvania will draw more people away from Maryland's tracks, he said.
Pennsylvania lawmakers passed legislation in July 2004 to allow slot machine gambling at its racetracks and other sites, but efforts to establish regulatory structure sputtered for months.
The state has yet to issue lucrative slots licenses, but a seven-member Gaming Control Board is expected to distribute licenses to 14 of 25 applicants who met a December deadline.
Pennsylvania's move to legalize slots has officials in West Virginia and Delaware considering a response. Delaware's governor has proposed more slot machines and extended hours at that state's racetrack casinos to cope with the competition, but some lawmakers are pressing for casinos in Wilmington and sports betting and table games such as blackjack, poker and craps. West Virginia's racetrack casino operators also are pushing for table games, and that state's legislature is expected to take up the issue this year.
"While it is an election year, and while there apparently is not the budget crisis there was a couple of years ago, the urgency surrounding the issue with the horse industry in Maryland is greater than ever," De Francis said.
Del. Eric M. Bromwell, a Baltimore County Democrat who was the lead sponsor of the slots bill that passed the House last year, said he is talking to his co-sponsors about reintroducing it. He said he thinks that the bill is the best compromise, and that, although the state's fiscal health is good now, deficits are projected for the next few years.
Legislators are often reluctant to take up controversial topics in election years, but Bromwell said slots are a crucial political issue in districts such as his.
Alan Friedman, the head of Ehrlich's legislative office, said the governor will unveil his agenda tomorrow, but he wouldn't say whether it will include a slots bill.
Others in the legislature said they can't imagine another serious slots push this year.
"Politically, it's not going to happen," said Sen. J. Lowell Stoltzfus, the Republican leader from the Eastern Shore, who opposes slots. "Even though the governor wants it badly, even though [Senate President Thomas V.] Mike Miller wants it badly, I think with Speaker Busch's position and with the economy the way it is, politically it's not going to happen."
Sun reporter Greg Garland contributed to this article.