Weighing the odds for Maryland

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Michael E. Busch is the Speaker of the Maryland House of Delegates. The Anne Arundel County Democrat was elected to the post in January.

First elected to public office in 1986, Busch is a Baltimore City native who has served on the Judiciary Committee and the Economic Matters Commitee -- chairing that panel.

In this session of the Maryland General Assembly, Busch has become the most visible opponent of Gov. Robert L. Ehrlich Jr.'s proposal for legalizing slot machines at three racetracks in Central Maryland -- Pimlico Race Course in Baltimore, Laurel Park and Rosecroft Raceway in Prince George's County -- and at a track proposed for Allegany County.

Besides helping to reduce a $1.3 billion budget deficit, the revenues from these machines, Ehrlich contends, would be used to revitalize the state's horse racing industry and finance the Thornton Commission legislation adopted last year by the Assembly.

The legislation seeks to reduce inequities among the state's public schools. It would pump $1.3 billion into schools by 2007.

With three weeks before the legislature's session ends on April 7, Busch explains his position and reacts to Ehrlich's charge that his opposition is race-based.

Why, specifically, Mr. Busch, do you object to slots in Maryland?

It's not a good public-policy initiative. Many people call it a gaming tax -- and it's the most regressive of all taxes, because the people usually who can least afford to lose the money are the ones who are involved in it.

You ought to take pause anytime when they have to put in money for addiction. To tell people that something's really good, and if you get addicted to it, there's money in it for help. When you're dealing with that, you ought to take pause and wonder if this is the right direction for the government to go.

By getting in the industry of gambling itself, there's the idea of creating what really are two monopolies: one for the owners of Pimlico and Laurel, and the other for the owners of Rosecroft. They become multimillionaires by default. It guarantees the businesses will never lose money, because the state becomes dependent on the money, as does anyone else, and they're going to guarantee that those businesses are going to be profitable.

Also, the way the plan's put together, even if you like slots, it doesn't seem to have any specific goals or objectives. Right now, 26 days before the end of the session, we don't have a complete piece of legislation. We don't have the language on the new proposed revenue splits. We don't have any understanding of the revised revenue projections.

Had Governor Ehrlich presented a detailed plan in January, would you have supported it?

Look, I'm a pragmatist -- as well as someone who tries to get as much information before I make a decision. That's just the way I am since I've been in the legislature.

The more questions he could have answered, the more favorable it would be viewed by the legislature. I actually think I am in the minority -- as far as the issues surrounding the legislation are concerned.

Really?

Yes. There's lot of people who came here, both Democrats and Republicans, who wanted to support the bill -- and the state's economic times drive it to make it even more appealing.

Having said that, I still do not believe that they will make as much revenue as they think. The idea of making $350 million -- it's a significant amount of money -- but in the overall course of things, it's not so great an amount that you would want to go down the road of promoting gambling as an industry in the state.

But Maryland already has gambling. It's called the lottery?

Yes, we do have gambling, but there's a difference: With lotto, you have mom-and-pop stores, convenience stores and local Alcohol Beverage Control stores. I would venture to say that all those stores would still be there even if they didn't have the lottery. There's basically a level playing field: Everybody has the same opportunity to get a lottery machine and participate -- and they get 5 percent of the revenues.

With slots, you're creating multimillionaires and monopolists, and you're giving an industry better than half the profits -- 49 percent for a slots facility that will contain more slots than most casinos in the country to 5 percent for those who run lottery machines out of convenience stores.

The Governor introduces a proposal for slots. It's heavily criticized. He goes back to the table and revises the plan that raises the take for racetrack owners while cutting back on education. It almost appears as if we're in the days of the smoke-filled back room, where a few people are sitting around a table and are, essentially, horse-trading legislation. Does it appear that way to you, Mr. Speaker?

This is my 17th year here. This is the strangest unveiling of a piece of major legislation that I have ever seen.

Why?

I just think that, on this issue, [Ehrlich and Lt. Gov. Michael S. Steele] are unprepared -- currently. The more prudent way to go is to think this legislation through before [proposing] it.

The Governor's revised plan estimates $120 million from licensing fees. Is that an accurate projection?

I don't think licensing fees are a good idea. It doesn't give the state the ability to oversee the industry, the revenues or percentages. I would take away the licensing fees. It's been lowered from $100 million to $40 million, so let's go all the way and do away with them …

… Even if it takes away upfront money?

It takes away upfront money, but I would adjust, maybe, some of the percentages on the back end. It also is not a good position for the state to be in -- where you sign this 20-year contract, and you're given a certain percentage of that -- and you don't know whether it's fair, equitable or whether the industry is going to make windfall profits that were never intended.

Everybody talks about what the split should be for the racing industry, but nobody went to the mayor of Baltimore or the county executives of Anne Arundel or Prince George's and said: "Can you give us a detailed impact of what burden this is going to be on your community?"

These questions seem to remain unanswered -- and yet you're opening a facility in communities that can be operating 365 days a year, 18 hours a day.

Without slots, how can the General Assembly balance the state's budget, given its $1.3 billion deficit?

Right now, we're working on closing loopholes, taxes and making other cuts. A penny on the sales tax would bring in close to $600 million. Closing up the corporate loopholes and increasing tax compliance would probably bring in $230 million to $250 million. And there are further cuts you will have to make …

… Even with slots revenue?

Oh sure. One of the fallacies is that, somehow, you're going to have slots -- and they're going to be up and running in a year. Magna [Entertainment Corp., whose Maryland Jockey Club subsidiary owns Pimlico and Laurel Park] has said -- and, to its credit -- that, particularly if they have to go through local zoning, it's going to take 12 to 14 months to be up and running.

In Allegany County, you don't even have a track yet. And, yet, you're leaving out Ocean Downs and Timonium, but all the tracks in the surrounding states have access to slot machines.

We want slots, but not in my community? But not in Ocean Downs? But not in Timonium?

That's one of the things I don't understand. Every track in Delaware has slots. In Pennsylvania, every track has, or is supposed to get, slots.

The idea that, somehow, Ocean Downs and Timonium should not get slots doesn't make sense -- and, particularly if you're in the economic conundrum you say you are, you would want to expand them to every location to make as much profit as you can.

Ocean Downs is, basically, a rural area, eight miles outside Ocean City, a tourist destination. People go there to relax, spend money. On a rainy day in the summer, they may head out to the track to play slots and bet on the horses.

I don't understand the differences in the environment between Ocean Downs and other locations. The fact is you're trying to attract all these people back from Delaware. You actually may be able to attract some Delaware people.

Do you believe slots disproportionally affect poor people, regardless of race?

I think they do. They disproportionally affect poor people -- regardless of whether they're white, African-American or Asian.

You go to the Annapolis Yacht Club and ask how many people would go to Pimlico if slots came, you probably won't find three hands that go up. They're not going to go.

Why?

There's nothing to attract them there. It's not the ambiance of the community. Slot machines are these big machines with bright, glaring lights, begging you to put another 50 cents or whatever in the machine.

It's not like an evening of entertainment, where you'd go out and have a nice dinner with your wife, listen to Lou Rawls and spend two hours playing the slot machines or black jack.

These slots are going into areas that, basically, for many years have been accommodating horse racing. I don't know if there's very many fine restaurants or live entertainment there. I'm sure they'll expand to some of that, but what's the attraction for slots? I know it attracts a lot of seniors, but what's the attraction to upscale, upper-income individuals? They don't seem to attract that kind of clientele.

Governor Ehrlich, in first presenting his slots proposal before the General Assembly, charged you with "playing the race card" on this issue. Do you believe you did that?

I think that, in some respects, at that point in time, he might have been frustrated at the fact that they [Ehrlich and Steele] didn't have any specifics for legislation that was touted to be the centerpiece of their agenda. We constantly asked and pushed for specifics, but they didn't have them.

And, though I had referred to blue-collar, lower-socioeconomic communities as, in many respects, predominately African-American, that's accurate. The legislative district around Rosecroft is 80 percent African-American, and around Pimlico, it's 75 percent. Laurel is more white versus African-American, but it's still, basically, a middle-class, blue-collar community.

That's factual, compared with Ocean Downs and Timonium, which seem to be left off the spectrum.

How did you feel hearing the Governor accusing you of, essentially, being a racist?

First of all, I think it was an error in judgment on his part. Evidently, he accused me of that because I went to an African-American church in Baltimore, which I was invited to. I was invited to go there after I had met [in January] with a group of ministers and opponents at St. Anne's Church [in Annapolis], where the vast majority of the ministers were white. One of the African-American ministers there came up to me asked me to meet with a group in Baltimore.

That's not out of the ordinary for me. I live in a community where 30 percent to 35 percent of the citizens of Annapolis are African-American. I've been in and out of African-American churches all my life. I know many ministers very well and am certainly friendly with the African-American community, so it didn't seem out of the ordinary to go to a church to where I was invited.

I don't know how race played into it, and I just think it was an error in judgment on the governor's part -- particularly in that forum.

But let me just say this: I've known the governor a long time. I believe the governor's a good man. I just don't know what possessed him to say something of that nature on that day at that given time.

I know the governor doesn't believe that I'm race-oriented, and I don't believe he is either -- and I don't know what judgment he used in making that statement.

How did it strike you, sitting in the Speaker's chair, and hearing such accusations?

It's never an easy thing to take legislation and personalize it against another legislator. You go in and defend your position. The ideas are the merit of the debate: What's good about this versus what's bad about it? That's what people want to see out of their legislators in Annapolis.

But the idea to try to circumvent any meritorious debate and accuse someone of some political motivation, particularly one of that nature, takes you back. I was hurt by the accusation, to tell you the truth.

How are you dealing with it?

I got over it. We've met several times. My role is such that I can't decide that this is offensive to me and I should stop talking to the governor. My role as Speaker of the House is that I have to communicate.

Has the governor apologized?

We haven't gotten into the position of apologizing. I'm sure both of us wished the issue did not happen. But we've had very cordial, very friendly meetings. Like I said, the governor's a very charismatic guy. I have a lot of great respect for him. I served with him for eight years.

Lt. Gov. Steele told SunSpot that, basically, no slots, no Thornton. Is it that simple?

Even if you have slots, that doesn't mean you'll pay for Thornton, Number One, which is a statement out of context.

Why?

Even if you have Thornton, you won't have any money next year. And the year after, if you have $300 million [from slots], you're still $700 million short of fully funding Thornton.

Everything I've heard so far gets predicated, "If we don't get slots, it's going to be cut," so they're spending the slots dollar: "If you vote for slots, you'll get arts money." Health care. Higher education.

It's our responsibility to support a quality education, and you make the tough decisions down here to try to make sure you do that.

And, now, you have to pay for these choices?

Yes. Through your traditional revenues like a sales tax, corporate tax, appliance tax, or you've got slots -- which is a voluntary tax, a gaming tax.

If you do it, you want to do it appropriately -- or, as in the old saying, do it right. This rush in here -- without the specifics, with less than four weeks before the end of the session -- puts, even to slots' supporters, some uneasiness into the discussion: "Do I vote on a bad deal, and it turns out to be worse than I think [later]?"

Thornton's share was cut by 20 percentage points in Governor Ehrlich's revised proposal. What's your take on that?

It shows that the homework done on the initial proposal wasn't very well done and, secondly, that there's a lot of profit involved in this without a lot of oversight. ... We have oversight over numerous initiatives. I don't understand why you wouldn't have economic development oversight on something of this nature.

If you're controlling the money, you can certainly demand certain things of the industry. There's no guarantee that they're going to build the buildings they say they're going to build unless you put it all in the legislation -- and we don't have that.

So with some controls, you would support slots?

It's not that simple. At this point, we don't even have a slots bill.

The lieutenant governor also said he does not believe slots will lead to other forms of gambling in Maryland. Do you agree?

It's hard for me to take seriously somebody who wants to put in facilities with 3,500 slot machines and then say it won't expand if you don't want it to. You're putting in the 800-pound gorilla of gambling and saying, "Whatever happens after this is really bad, but this stuff is OK" [chuckle]. If it's not good for it to expand, why would you put it there in the first place?

Has the state's horse racing industry helped itself over the years?

There are some people who would argue that we'd be rewarding a failing industry that has done nothing to help itself. Why not go and put slot machines in the old Bethlehem Steel plant and help underwrite a good steel manufacturer and put people back to work in high-paying labor jobs?

With so little time left before the session ends, will this legislation be railroaded into passage?

That's what many people obviously believe: They're looking at a mass rush at the end of the session -- the ol' 72-hour finish.

Can you stop it?

That's the danger point, because that's when people make mistakes. You start to pass legislation that, ultimately, is not always the best-thought-out resolution.

So what do you do at this point?

The key to this, like anything else in life, is preparation plus opportunity equals success.

You try to take a look at all the options and, keeping in mind, the fact that the will of the body needs to be put in the best possible position. I just think it's going to be hard for anybody to justify [slots].

You're the governor's most visible opponent of slots in Maryland …

… Yes I am [chuckle]. Yes I am …

Are you comfortable with that?

No [laughs]. The debate has raised some concerns with legislators who might have voted for slots. I wish I were joined by more people with the same concerns, but no matter what happens -- whether we wait a year, or if the compromises come at the last minute -- it will bring forth a better piece of legislation. The legislation will be better because of the debate.

You joined the General Assembly in 1987. You're now debating slot machines in Maryland. Is this an indication of how far the state has come or how far it's fallen?

It's been a depressing session. Many government programs are going to be hurt. It's not a happy time to be making decisions that affect people and their families. It's far different from the land-of-plenty days when you had to decide on a new school, or on whether to add an auditorium to the school.

Maryland is in a recession, in a deficit. It's a national recession -- and it's not unique to Maryland. But it's not all that bad. We still have our AAA bond rating, and there's a surplus in the Rainy Day Fund.

Ever since Sept. 11, there's been a lot of government contracts -- National Security Agency, Northrop Grumman Corp. The National Institutes of Health is going full throttle. The medical community is great economic development for the state. With the homeland security, we're likely to see something -- and that's why we have been able to weather the recession.

Copyright © 2014, Los Angeles Times
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