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Slots bill left out zoning, planning, impact, aid

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In its haste to put together a plan to legalize slot machines, Gov. Robert L. Ehrlich Jr.'s administration appears to have left serious gaps that could delay the start of gambling at Maryland's racetracks and leave the state's budget short hundreds of millions of dollars.

Ehrlich's staff acknowledges the administration has not studied how creating Wal-Mart-size slots emporiums would affect local neighborhoods.

The plan also appears not to have considered the local planning and zoning hurdles such construction would have to clear, which local officials say could take a year or more in some areas - potentially throwing off the state's budget projections for the next two years.

Meanwhile, the horse owners whom Ehrlich's proposal is intended to help complained yesterday that the governor's bill doesn't include any provision requiring live horse races at the tracks. The Maryland Thoroughbred Horsemen's Association called the omission an "Empire State Building"-sized hole.

Those were only a few of the problems with a bill that is attracting growing criticism as more people read the legislation and interpret its complex details.

Del. Howard P. Rawlings, a slots supporter whose initial reaction to the Ehrlich plan was positive, was sharply critical yesterday after reviewing the fine print. "We probably won't have a slot machine bill," the Baltimore Democrat said. "Their proposal is more political than trying to address an issue."

The governor's plan to install 10,500 slot machines at four racetracks - with the state taking 64 percent of the proceeds for education - was unveiled last week at a news conference that Ehrlich did not attend. The bill devotes about a third of the profits to various horse-racing interests and only 3 percent to the cities and counties where the tracks are located.

Rawlings was one of several elected officials who objected yesterday to an Ehrlich aide's explanation of the administration's reasons for proposing a relatively modest share for the localities.

Joseph M. Getty, the governor's policy director, said this week that the decision to designate only 3 percent of slots profits for local impact aid was made in part because counties and Baltimore City benefit from new dollars for public schools through the Thornton Commission's plan for education.

"The whole education formula favors Baltimore City and Prince George's County," Getty said, referring to the locations of the Pimlico and Rosecroft racetracks. "Our intent with 3 percent was to make them whole in infrastructure while at the same time recognizing that they're getting substantial benefits from the education dollars."

Rawlings, whose rival bill would devote more than twice as much to soften the local impact, said he doesn't see the relationship between the Thornton formula and the local share of slots proceeds. "I think it's a false position," Rawlings said. "Thornton benefits every county in the state of Maryland."

'Gambling gimmick'

Getty's comments also brought criticism from Baltimore Mayor Martin O'Malley, who said the 3 percent share would not cover the increased infrastructure, public safety and social costs the city would incur from "this gambling gimmick."

The mayor noted that the city would not be permitted to use its Thornton dollars for any purpose other than education. "The things they don't fund, we're forced to provide," he said.

Getty said he does not believe that the governor's drafting team consulted with local officials before proposing the 3 percent figure.

O'Malley said the Ehrlich proposal was "unrealistic" in its projection of when slot machines would begin to come online and produce revenue.

The mayor said the "best-case scenario" for a project the size of the gambling hall planned for Pimlico to get through the permit process would be a year - if it did not need zoning changes.

However, city Planning Director Karen Hilton said the Pimlico project would require such changes. She said city zoning ordinances would have to be amended before the owners of Pimlico could apply for permits to build or renovate facilities for a slots operation.

Hilton said the process involves a series of public hearings, consideration by the planning commission and a vote of the City Council. She said the process could take as little as three months if the project is not contested, but more than six months if it is.

The Ehrlich administration is projecting that the first slots will come online in March 2004, and that 9,000 will be up and running at Pimlico, Laurel and Rosecroft by July of that year, when fiscal 2005 begins.

The administration is projecting $600 million in revenue from slots in fiscal 2005 and more in the years thereafter. But if the city zoning and permitting processes together take 18 months, construction would not be able to start until late 2004.

Then, if construction at Pimlico takes six months to a year, that could delay the full revenue stream from gambling until mid- to late 2005, when the state will be on its 2006 budget.

Prospects were equally unclear in jurisdictions other than Baltimore.

In Anne Arundel County, home of Laurel Park, Planning Officer Joseph W. Rutter Jr. said that the permitting process for a slots facility at the track could take anywhere from a few weeks to a year or more - depending on what kind of facility the owners want to build and how quickly they respond to local planners' inquiries.

Rutter said that the track's zoning category does not include casino uses, which means track officials could be forced to request an amendment to the county's zoning code - a process that would require legislation and approval by the County Council.

Rutter said the process could be shortened if the state legislation contains language allowing slots at tracks as accessory uses. However, the bill submitted by Ehrlich does not address zoning issues.

Prince George's County officials said they could not estimate how long the approval process would take there until they review the legislation.

Impact on fees

Also unclear is whether racetrack owners would pay the hefty up-front licensing fees that the state is demanding by July 2004 if they were to face delays in the local permit and zoning processes.

The Ehrlich administration is counting on $350 million in fees from the racetracks to help balance next year's budget.

Getty, the Ehrlich policy director, said the bill was the result of three weeks of drafting by three Ehrlich aides - Getty, chief legislative officer Kenneth Masters and aide Donald Hogan. To avoid the appearance of undue influence, Getty said, the aides deliberately avoided consultation with the racing industry during that process.

Now the formula is being heavily criticized by horse racing industry officials, who have said that it does not provide enough money to pay for their heavy infrastructure costs and that it fails to promote racing.

Richard J. Hoffberger, president of the Maryland Thoroughbred Horsemen's Association, said the Ehrlich bill has a gaping flaw: It doesn't require racetrack owners to conduct live horse races.

"There is no provision in the bill for live racing," Hoffberger said. "That's real, real big - Empire State Building big."

Hoffberger, whose association represents race horse owners, trainers and track workers, said the racing industry had sought 220 live racing dates a year at mile tracks. "I think in its current form, the bill is a recipe for disaster," Hoffberger said. "It should not pass in its current form. Someone could buy a track and say, 'I've got slot machines, but guess what? We're not going to race.'"

Getty said the reaction he has heard had been more positive. "The response we've been getting is that the bill's a very realistic bill that needs to go through the legislative process," he said, noting that its formula is not "etched in stone."

However, Getty conceded that the administration has conducted no studies of the local impact at the four racetracks.

House Speaker Michael E. Busch, a slots opponent, said he doesn't know of any other major public projects that would go forward without studies of the impact on transportation, public utilities, public safety and school systems.

"Even if you like slots, you have to ask yourself 1,000 questions about this proposal," said Busch, who added that the lack of information supports his position that the General Assembly should take a year to study the issue.

Sun staff writers Lynn Anderson and Doug Donovan contributed to this article.

Copyright © 2014, Los Angeles Times
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