- The Washington Times - Wednesday, September 26, 2007

GLYNDON, Md. — Gov. Martin O’Malley yesterday released the first details of his plan to legalize slot machines, expected to be the most contentious part of his proposal to raise $2 billion while closing the state’s $1.7 billion budget shortfall.

Mr. O’Malley, a Democrat, anticipates enough revenue from slots to raise $125 million for school construction, $425 million for education, $100 million to supplement horse racing purses and $6 million to treat gambling addiction.

An O’Malley spokesman said the governor’s fiscal 2009 budget would include at least 9,500 slot machines and would be similar to a bill the House passed in 2005. He would not say where the machines would be placed.

Mr. O’Malley also has proposed to increase taxes on personal incomes and on goods and services.

“This is a very difficult issue for all of us,” Mr. O’Malley said. “Certainly we’re all talked out on this, aren’t we?”

Proposals to legalize slots gambling in Maryland have divided state lawmakers for nearly five years. Slot-machine revenue has been touted as the salvation of Maryland’s ailing horse-racing industry.

Gov. Robert L. Ehrlich Jr., Mr. O’Malley’s Republican predecessor, and Senate President Thomas V. Mike Miller Jr., Southern Maryland Democrat, proposed several plans to legalize slots, but the bills were killed in the House.

“My position on gambling has not changed: I am not an advocate for slot machines,” House Speaker Michael E. Busch, Anne Arundel Democrat, said yesterday. “I don’t think we can expect Marylanders to step up to the plate and pay $2 billion in taxes while unjustly enriching racetrack owners. I’ll wait to see the full details of the governor’s plan, but we will continue to work toward a comprehensive budget solution.”

In 2005, Mr. Busch refused to negotiate the details of the House slots plan with Mr. Ehrlich and Mr. Miller.

At the press conference yesterday at the Maryland Stallion Station in Baltimore County, horse breeders and farm owners surrounded Mr. O’Malley, Lt. Gov. Anthony G. Brown and Labor Secretary Thomas E. Perez. It was Mr. O’Malley’s fifth stop on a statewide tour to discuss his budget plans.

Last week, the governor proposed cutting the income-tax and property-tax rates and raising the income tax for high-wage earners and small businesses. He also announced plans to increase and expand the sales tax, increase the corporate income tax, close corporate tax loopholes and raise the car-titling tax and gas tax.

He is expected to announce a $1 increase in the cigarette tax this week.

Mr. O’Malley has not said how much of his revenue package would go toward closing the structural deficit or to new spending.

Mr. Perez issued a report this year saying Maryland residents spend an estimated $400 million a year on slots gambling in neighboring states and that the state is losing $150 million annually in tax revenue to those states.

Representatives of the state’s horse-racing industry say slot machines in Delaware, Pennsylvania and West Virginia take business from Maryland and that gambling proceeds help fatten purses in other states.

“All I can tell you is that we have to have [racing prizes] that [are] superior to New York, Pennsylvania and Florida. They are our true competitors,” said Henry Holloway, owner of the Mill, which sells feed to horse breeders across the state. “I think we can whip Delaware and I think we can whip West Virginia.”

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