When Congress passed Obamacare in 2009, House Speaker Nancy Pelosi famously said, “We have to pass this bill to see what’s in it.” So, now that Maryland’s General Assembly has passed a gambling expansion bill during this week’s special session, let’s see what’s in it.
Thousands of workers will be needed to build and run PG’s new casino (probably at National Harbor), but those jobs won’t appear for three or four years because the bill delays that casino’s opening until July 2016.
Also, most of those construction jobs won’t go to Marylanders. Apparently the new casino will be built under a PLA (Project Labor Agreement), limiting it to union workers only. That was the price of labor’s support for the bill. But only 11 percent of Maryland’s 146,215 construction workers are union, so most of the new jobs will go to non-residents.
New School Spending
Maryland voters approved slots in 2008 because new gambling tax revenue would increase school funding. True, the 2008 bill created an Education Trust Fund (ETF) into which most of the gambling revenues flow ($144.3 million so far).
But not one penny of that money was used to increase school spending. Instead, the $144.3 million was used to supplant (replace) $144.3 million of other state funds that, otherwise, would have been used for schools. In other words, for every ETF dollar spent on schools, the state backs out a dollar earmarked for schools and uses it for non-education spending.
There’s been no increase in school spending, whatsoever. If you don’t believe me just look at page 22 of the bill’s fiscal note: in FY 2013 it shows $21 million of ETF funds going to schools and, as a result, $21 million in the state’s General Fund being freed-up. Promising that gambling will increase school funding (“Slots for Tots”) simply is a hoax!
What the new bill does do is relax almost every limit put on gambling back in 2008.
The number of slot machines increases from 15,000 to 16,500. The casino locations increase from five to six. In addition to slots, table games (craps, black jack, roulette, etc.) now are permitted. And, to buy last minute legislative votes, slots at veteran’s halls now are legal.
Casino closing times (2 a.m. weekdays, 4 a.m. weekends) no longer exist — casinos can operate around the clock, around the calendar. And the bill opens the door to unlimited liquor hours, too.
But the biggest “take back,” by far, is the bill’s casino tax cuts. In May’s special session, Gov. Martin O’Malley and the legislature increased income taxes on every Marylander making more than $100,000. In this week’s special session they lowered the state’s gambling tax on every casino as follows:
Ÿ Anne Arundel’s casino is eligible for a 27 percent tax cut.
Ÿ Baltimore’s future casino is eligible for a 24 percent tax cut.
Ÿ PG’s future casino is eligible for a 17 percent tax cut.
Ÿ Cecil County’s casino is eligible for a 17 percent tax cut.
Ÿ Ocean City’s casino is eligible for a 16 percent tax cut, and
Ÿ Western Maryland’s future casino is eligible for a 33 percent combined tax cut.
But wait, that wasn’t enough. After cutting the state’s 67 percent tax rate for all six casinos, O’Malley and the legislature had to set a tax rate on table games, the casinos’ newest gift from Annapolis. Instead of 67 percent, the bill sets the table games tax rate at 20 percent and one quarter of that state revenue is siphoned off to Baltimore city, PG County and a few other subdivisions to get their lawmaker’s votes.
Bottom line, after all the tax cuts and other pay-offs max out in 2017, the state’s Education Trust Fund will gain an additional $21 million per year and the casinos will gain an additional $228 million per year. It’s a great deal … for the casinos.
Of course, it’s not a great deal for the poor suckers who will be losing $1.4 billion per year at the casinos. But don’t worry the state is setting up a 24-hour hotline for gambling addicts. The bill also prohibits casino ATMs from accepting welfare cards — that way poor folks will have enough left to call the Problem Gambling Fund’s hotline.
Under “negative impacts” the bill’s fiscal note forecasts that the “increased levels of crime, unemployment and personal bankruptcies … are likely to be greater than the additional funds dedicated to the Problem Gambling Fund under these bills.”
Which raises the gambling bill’s greatest contradiction: This assault on gambling addicts and the poor is being waged by “progressive,” liberal Democrats suffering from their own addiction … spending.
These progressives pride themselves on making Maryland into a nanny state that protects us from trans fats, second hand smoke, fracking and pit bulls. But now that they’ve taxed and borrowed to the limit, they’ve put the gambling revenue needle into their arms.
It’s sheer madness but, thanks to the state’s constitution, this gambling bill cannot become law unless approved by the state’s voters in November. Our elected officials are out of control, and the Nov. 6 election is the last chance for a voter intervention.
Blair Lee is CEO of the Lee Development Group in Silver Spring and a regular commentator for WBAL radio. His column appears Fridays in The Gazette. His email address is firstname.lastname@example.org.