- The Washington Times - Monday, February 10, 2003

Republican Gov. Robert L. Ehrlich Jr.'s threat to abandon legalized gambling if the proposal fails this year is forcing Democratic opposition to find alternative revenue through deep and unpopular long-term spending cuts.
"If it doesn't pass this year, then it is off the table," Ehrlich spokesman Henry Fawell recently said. "It is this year or never."
According to Mr. Ehrlich's bill, licensing fees and revenue from slot machines at four race tracks would put $395 million in his proposed 2004 budget. The bill also calls for 64 percent of the revenue from the 10,500 state-regulated machine to go to public schools.
As a result of Mr. Ehrlich's ultimatum and opposition to tax increases, state lawmakers are considering deep spending cuts to replace slots revenue, which is estimated to be as much as $1.3 billion in coming years.
House Speaker Michael E. Busch, Annapolis Democrat and a chief opponent of the slots bill, has said the House leadership is working on a package of cuts to replace slots revenue this year. He also has said only an entirely new tax and budget structure could fix Maryland's long-term budget deficits.
Mr. Busch also said he was befuddled by Mr. Ehrlich's ultimatum.
"I don't know what predicates the governor to say that, but he has a right to say that," Mr. Busch said. "He's got an unworkable slots plan. He's taken taxes off the table and he has a budget deficit."
Mr. Ehrlich's ultimatum is, in part, a response to House Democrats threatening to impose a one-year moratorium on the slots legislation. The proposal has the minimum 71 Democratic sponsors, but Delegate Peter Franchot, Montgomery Democrat, acknowledged the maneuver was really party members reminding everybody they have the majority of votes in the General Assembly.
Maryland Republican strategist Kevin Igoe said yesterday that even if Mr. Ehrlich is bluffing, Democrats are now forced to cut popular programs.
"The question is, do the liberal Democrats in the General Assembly have the stomach to make those cuts?" Mr. Igoe asked. "I think the answer is no."
Cheryl C. Kagan, political consultant to Maryland Democrats, disagreed. "It's not a question of guts," she said. "It is a question of finding that kind of money in the budget."
Mrs. Kagan, a former delegate from Montgomery County, called the governor's ultimatum a "fascinating but short-sighted strategy" that raised questions about his commitment to legalizing slots after campaigning heavily on the issue.
"It's hard to believe that he would take something he is committed to off the table if he doesn't win this year," she said. "I don't foresee him doing the same on charter schools. Why is he playing hardball on this issue?"
House Democratic leaders are considering cuts proposed by the nonpartisan Department of Legislative Services and other measures. Proposed cuts include $240 million from state aid to local governments, including a $102 million cut to local highway maintenance and a $92 million cut on deductions Marylanders can take on their state income taxes.
They are also eyeing cuts of $37.4 million to higher education; $167 million to state agencies; $15 million to the governor's initiatives; $12 million in grants to arts councils, technology development and textbooks for parochial schools; and $50 million from Medicaid.
A bill introduced last week by Delegate Howard Rawlings, Baltimore City Democrat, would levy a temporary income tax surcharge of 1 percent on Marylanders earning more than $100,000 a year and couples earning more than $150,000.
The proposal would generate $600 million over three years, with half the revenue collected the first year.
Other tax increases under consideration include closing $200 million worth of tax preferences for corporations, including an exemption on paying transfer tax on property sales that saves corporations about $40 million a year.
Mr. Ehrlich has promised to veto most tax increases. He also has expressed strong opposition to some of the proposed cuts, including reduced state aid to local governments.
"The cuts are horrendous," said Greg Massoni, the governor's deputy communications director. "Sadly, they are not offering any alternative, so I think they know slots [legislation] has got to pass."

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