With votes to spare for a three-fifths supermajority, the Maryland Senate on Thursday night approved Gov. Martin O?Malley?s plan to allow voters to decide next year whether to put up to 15,000 slot machines at five locations. The measure could raise about $500 million for education by 2012.
It?s now up to the House of Delegates to approve a key component of the governor?s revenue-raising package with a similar supermajority, despite the House?s long reluctance to embrace the gambling scheme.
The Senate voted 31 to 15 to approve the referendum, with five Democrats joining 10 Republicans in opposing the plan. The detailed plan to run slots and set up a new education trust fund was okayed by a 25 to 20 tally. Five Democrats who voted for the referendum rejected the bill to implement it.
“We?re a long way from home” on enacting O?Malley?s package, Senate President Thomas Mike Miller said. “There?s going to be a lot of give and take. It?s going to be a tough time ahead.”
Before the final votes on slots, the Senate gave tentative approval to the major tax increases and spending cuts in the governor?s plan. But the tax measure faces a filibuster from Republicans when the Senate begins work on the measure Friday morning.
In a major floor amendment offered by Sen. Brian Frosh, D-Montgomery, that passed by one vote, people who live more than three months a year in Maryland would have to start paying state income taxes. The current law sets the requirement at six months.
“I don?t care for the so-called snow bird amendment,” Miller said, predicting it will hurt support for the bill on a final vote.
The revenue measure also raises the sales tax from 5 to 6 percent, and extends the tax to computer services. Those services and landscaping were added by the Senate Budget and Taxation Committee on Tuesday without a hearing, and there were several attempts to take those provisions out of the bill.
The most serious challenge to the committee action came from Sen. Delores Kelley, D-Baltimore County, who wanted to remove landscapers from the new taxes. “These are micro-businesses,” Kelley said, many of them small entrepreneurs.
“The real money is with accountants and lawyers,” Kelley said, but there was no attempt to tax those services. Taxing landscapers would raise $25 million.
At the end of the day, the committee relented and took landscaping services out of the legislation.
There were also serious attempts to remove a sales tax on computer services, a new levy that would raise $250 million. Those efforts failed on 21 to 26 vote.
Some of the Republicans who supported slots when GOP Gov. Robert Ehrlich proposed them opposed O?Malley?s plan because they said they wanted to work on the proposal during the regular session without putting it to voters.
“This bill does not belong in the constitution at all,” said Sen. E.J. Pipkin, R-Upper Shore. Another Republican, Sen. Alex Mooney, said education funding should not be tied to gambling.
On Thursday, the Senate rejected efforts to remove the Ocean City site from the governor?s plan, and add Rosecroft Raceway in Prince George?s County.
Sen. Lowell Stoltzfus, whose Lower Shore district includes the ocean resort, said businesses and elected officials in Worcester County all opposed slot machines at Ocean Downs racetrack.
“Rosecroft would generate another $200 million” over Ocean City, Stoltzfus said. Putting the slots operation in Prince George?s “does not cannibalize existing businesses,” as putting slots near a resort does. But he said, “I can understand why Prince George?s does not want the site in their county.”
Many lawmakers, including Senate President Thomas Mike Miller, support putting slots at Rosecroft, but O?Malley?s staff cited community opposition to the plan.
Sen. Ed Kasemeyer, vice chairman of the Budget and Taxation Committee, said, “We didn?t have the resources to conduct an economic analysis,” but relied on the governor?s proposal. “The sites that were selected were strategic,” Kasemeyer said.
The Senate rejected efforts by Sen. George Della to force Baltimore City to lower its property tax rate with the money it will get from slots, as Mayor Sheila Dixon has suggested she would do.
“I think the mayor fully intends to do this,” said Sen. Nathaniel McFadden, chairman of the city delegation, arguing against the amendment.
