Tuesday, October 28, 2008

McMillan: O'Malley's Slots Myths

Maryland Slots....Rewarding Fiscal Irresponsibility

We saw it during the Wall Street bailout. Fiscal irresponsibility. Political spin broadcast as fact by the media. Politicians using sweeteners and strong arm tactics to push a deal that's "good for everyone." Special Interests spending millions to promote their agenda. Doing "something" becoming more important than doing the right thing. What were the results? Fiscal irresponsibility was rewarded. Politicians got their deal, but ignored the policies that created the crisis. Special interests profited, and taxpayers got the bill. The same scenario is unfolding with Maryland's slots referendum. But before we reward Governor O'Malley's fiscal irresponsibility, before we accept his slots spin as fact, before we believe the false promise of more education funding, and before we give special interests another big payday, let's compare O'Malley's slots myths with the facts.

O'Malley Myth #1: "Maryland's budget has been cut by $1.8 billion. Even after a $1.5 billion tax increase, we need slots to avoid painful cuts in services." Fact: Maryland's budget increased from $30 to $31.2 billion after the Special Session. You can't make $1.8 billion in budget cuts, and simultaneously increase spending by $1.2 billion. It's no more possible than having your grass grow two inches while you're cutting the lawn. During the Special Session called to "fix" O'Malley's $1.7 billion deficit, spending on new or expanded programs nearly equaled spending reductions. Additionally, 40% of the $1.4 billion tax increase went to increased spending, not deficit reduction. Total spending wasn't cut. It was redistributed and increased. Most of O'Malley's recent "cuts" simply level fund programs, or eliminate vacant jobs. Only $156 million in ongoing annual spending was actually cut. State spending still grows by $800 million this year. The fiscal bottom line: Martin O'Malley blew a $1 billion surplus, raised taxes $1.5 billion, increased spending, and created a new $1.4 billion deficit. His reckless policies preceded the national economic downturn. Now O'Malley wants a slots bailout, not to avoid cuts in basic services, but to grow big government programs. Maryland can't tax and gamble its way to prosperity, or spend itself out of a deficit. Excessive spending and higher taxes are the root causes of Maryland's economic problems. Slots won't solve them. Slots will simply add fuel to the government's spending fire, while pulling $1.4 billion away from existing Maryland businesses. Slots, like tax increases, will hurt small businesses, kill jobs, and weaken our economy.

O'Malley Myth #2: Slots receipts will go to an Education Trust Fund, and used to increase education funding. Fact: 48.5% of the funds generated by slots will be earmarked for education. Gambling interests will receive 42.5%. The slots amendment doesn't guarantee any increase in education funding. It doesn't even protect education funding from cuts. The slots amendment only requires the state's slots revenue to be used as a source of education funding. It does not prohibit the state from shifting general fund dollars previously designated for education to other budget items, and replacing them with Education Trust Fund dollars. Sound tricky? These shell game shenanigans are business as usual. During the Special Session, legislation required $100 million of the sales tax increase go to the Transportation Trust Fund. This April, O'Malley shifted $50 million from the Transportation Trust Fund to balance the budget. Who are you going to believe when it comes to "trust" funds, Governor O'Malley, or your lying eyes?

O'Malley Myth #3: Those who supported Governor Ehrlich's slots proposal should support O'Malley's. Fact: Governor Ehrlich and many other slots supporters oppose the slots constitutional amendment because it's a bad deal. Governor O'Malley has radically changed the terms of Ehrlich's slots agenda. Under Ehrlich, slots and cuts instead of higher taxes were arguably the lesser of two evils. With O'Malley, slots after a record tax and spending increase are just an additional evil. During his first term, Governor Ronald Reagan faced with a budget shortfall. Legalized gambling was proposed as a solution. Reagan rejected the idea, stating, "The state should be funded from the strength of our people, not from their weaknesses." Reagan is right. There are no easy answers to our budget problems, but there are simple ones. The most obvious one is for government to spend no more than it receives. That's not much to ask on the heels of a $1.5 billion tax increase.

On November 4th, instead of rewarding fiscal irresponsibility, accepting another bad deal, and writing gambling interests another big check, let's tell Governor O'Malley that it's time for government to start living within its means, just like we do. Vote YES for fiscal responsibility, and vote NO on slots, Question #2.

Herb McMillan served in the Maryland House of Delegates from 2003-2007 and is currently President of the Maryland Taxpayers Association. Budgetary data provided by the Maryland Department of Legislative Services.

1 comment:

Rasta Jones said...

This is not about O'Malley as Ehrlich tried to do it too. I think slots are a silly way for a government to fund itself regardless of what regime proposes it as the cure-all .

However, I see legalization of marijuana as a great way to increase revenue through a vice tax.