In less than five months, Marylanders will vote on whether to allow slots in the state. This is a big decision. And we support it. But we do not think voters should choose sides based on false information.
That is exactly what the state?s revenue projections are, based on interviews with gaming experts, studies and the downward slide of the economy since the Department of Legislative Services first released its analysis of the impact of legalized slot machines last year.
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The DLS estimates the state would reap about $565 million per year from slots in 2013 and $87 million as soon as fiscal 2010. Gov. Martin O?Malley has said the figure could be as high as $800 million per year. Based on these numbers the governor is already budgeting hundreds of millions in extra spending for health care and schools. And the measure hasn?t even passed yet.
For everyone?s sake, we think the DLS should revisit its projections. The worst thing that could happen would be for the so-called solution to the “structural deficit” to send the state into additional debt. Even Moody?s, which gives Maryland a coveted AAA bond rating for its conservative financial management, says slowing tax revenue and “overly optimistic” projections about slots pose risks for the state?s long-term financial health.
Besides, Marylanders should not have to cull through all of the “he said, she said” arguments floating out there on both sides of the debate.
If all the naysayers are really wrong, supporters should be able to say so outright. For now, people like Fred Puddester, who leads the pro-slots campaign, can only say the numbers are “pretty decent.” They could be “really solid” if the state addressed how: 1) slots venues do not reap as much money as full casinos; 2) the high taxes proposed for slots could deter investment; 3) subsidies to horse racing could deter investment; 4) adding slots will or will not increase the total entertainment dollars spent in the state; and 5) a slowing economy could affect investment in slots venues and the money spent in them.
We do not think smaller numbers mean people should vote no on slots. We see no reason why neighboring states should benefit from Marylanders? entertainment dollars. But good public policy demands accurate financial statements. From experience, we know the state will never return money to taxpayers when tax collections exceed projections. Neither will it cut spending to remedy shortfalls. So stopping inflated spending before it happens is imperative.
