Put Up Your Dukes!

Ladies and gentlemen, welcome to the Woman’s Club of Chevy Chase for a night of the best in political entertainment!

In the red corner, standing at five feet, eight inches and weighing in at 145 pounds, originally from Buffalo, New York and now fighting out of Takoma Park, Maryland… with a record of one win, no defeats and one disqualification… Maryland’s Secretary of Labor, Thomas E. Perez! (The crowd goes wild.)

And in the blue corner, standing at six feet even and weighing in at 175 pounds, originally from New Haven, Connecticut and now also fighting out of Takoma Park, Maryland… with a record of six wins and one defeat… Maryland’s Comptroller, Peter V. Franchot! (And the crowd goes wild.)

Wouldn’t this be great? Well, it won’t happen exactly in this fashion, but Carole Brand advises us that the Secretary of Labor and the Comptroller will be holding a public debate on slots. Courtesy of Ms. Brand, here are the details:

Wednesday, September 10 Forum on Slots

As you know, the November election will bring to the ballot a referendum on expanding slot machines in the state of Maryland. This proposal has evoked strong arguments for and against it, and the Woman's Suburban Democratic Club of Montgomery County is hosting this forum to help you explore this issue and its implications for our state.

Maryland Comptroller Peter Franchot will take the anti-slots position, and Maryland Secretary of Labor Tom Perez will take the pro-slots position. Bruce De Puyt of News Channel 8 will moderate the discussion.

The forum is free of charge and open to all. Questions will be taken from the audience.

Date: Wednesday, September 10, 7:30 - 9:00 p.m.

Place: Woman's Club of Chevy Chase
7931 Connecticut Avenue
Chevy Chase, Maryland

Contact Carole Brand, csbrand@verizon.net/301-657-2547

Lou Simmons Breathes Fire, Burns Bridges on Slots

Kathleen Miller of the Examiner picked up some nice quotes from flame-throwing Delegate Luiz Simmons (D-17) blasting his colleagues for not supporting the anti-slots campaign. Here's a sample:

“Slots are the easy road for politicians to travel down; it holds the promise of a free lunch, all net-net and no cost,” the Montgomery Democrat said. “Overwhelmingly, those who lose money are the poor, the old, the vulnerable and racial minorities, the very same people we’re always saying we are trying to help...”

Simmons said, “The Montgomery County political establishment has caved in here.” What bugs him the most, he added, is that Montgomery’s state legislators, who largely fought together against slots proposals from former Republican Gov. Robert Ehrlich, were vital to passing this year’s referendum.

“I thought when many people spoke out against Ehrlich’s slots, that they spoke on principle,” Simmons said. “It turns out they spoke on politics. Here’s a group that said rhetorically, we’re against slots, but when push came to shove, the referendum couldn’t have passed without them.”

Well now! We ran a complete list of the elected leaders who joined the anti-slots campaign back in May, along with those who voted against the referendum but did not sign on with Marylanders United to Stop Slots. Delegate Simmons is a longtime opponent of slots, but one wonders whether statements such as these are the best way to persuade his fellow politicians to join his cause.

Would you care for some saltpeter to go with that nitroglycerin you've been drinking, Delegate?

Slots Polling Foreshadows New Marketing Initiative

Someone has hired a sophisticated polling firm to analyze voter attitudes on slots, as my wife and I found out last night. This signals a new marketing effort on the issue.

Have you ever made the mistake of answering the phone right before dinner? I rarely do that – I am too busy fielding cell-phone calls from complaining MPW readers! Anyway, my wife actually answered the phone and the call was from a polling firm identifying itself as “Issues and Opinions.” The caller kept her on for over a half-hour with questions broken out into the following categories:

1. Ratings of Politicians and Economy
The caller began by asking my wife to rate Barack Obama, John McCain, Martin O’Malley and other politicians on a scale of 1 to 10. Then he asked her to comment on the state of the economy in Maryland.

2. Tests of Slots Arguments
The caller tested a variety of arguments favoring and opposing slots. He would read one argument and then ask her to rate it as very convincing, somewhat convincing, somewhat unconvincing or totally unconvincing. Examples of the tested arguments in favor include “slots are an alternative to tax increases,” “slots are necessary for education,” and “Marylanders are spending lots of money on slots in other states.” Examples of the tested arguments opposed include “politicians will raise taxes anyway,” and “slots will cost more dollars to fight crime and addiction than they will generate for the state.” There were many, many other tested arguments on both sides. Clearly, the caller wanted to know what would work.

3. Questions on Supporters or Opponents of Slots
The caller asked my wife whether knowledge of a politician’s or organization’s position on slots would affect her position one way or the other. Tested supporters or opponents included Martin O’Malley, Mike Miller, Peter Franchot, “your state legislators,” the Maryland Chamber of Commerce and the Maryland State Teachers Association.

4. General Demographic Questions
The caller finished by asking my wife to identify her age, race, party affiliation (and strength of affiliation), political ideology and religion.

This was a long and sophisticated poll with dozens of questions. The details will provide ample opportunity for informative cross-tabulations if the firm contacts enough respondents. The firm is seeking to develop a matrix that will illustrate the most effective arguments, both favoring and opposed, for each of many racial, age-based, political and geographic sub-units. This is clear preparation for an advanced mass-marketing effort.

My hunch is that the anti-slots activists do not have enough money to afford professional research of this kind. That means it is a project implemented by the well-financed pro-slots forces. Get ready, people – whatever your opinion on slots, you will be hearing scientifically-tested arguments on them very soon!

Who Really Opposes Slots? (Updated)

Marylanders United to Stop Slots recently released a list of 102 state leaders serving on its steering committee. Of the 15 State Senators and 52 Delegates who voted against last year’s slots referendum, only 12 have signed on for the anti-slots campaign.

The elected leaders on the steering committee are:

Congressman Wayne Gilchrest (R MD-1)

Comptroller Peter Franchot
Senator C. Anthony Muse (D-26, Prince George’s)
Senator Paul Pinsky (D-22, Prince George’s)
Delegate Curt Anderson (D-43, Baltimore City)
Delegate Joanne Benson (D-24, Prince George’s)
Delegate Elizabeth Bobo (D-12B, Howard)
Delegate Aisha Braveboy (D-25, Prince George’s)
Delegate Bill Bronrott (D-16, Montgomery)
Delegate Jill Carter (D-41, Baltimore City)
Delegate Marvin Holmes (D-23B, Prince George’s)
Delegate James Hubbard (D-23A, Prince George’s)
Delegate Tom Hucker (D-20, Montgomery)
Delegate Jolene Ivey (D-47, Prince George’s)
Delegate Gerron Levi (D-23A, Prince George’s)
Delegate Anthony McConkey (R-33A, Anne Arundel)
Delegate Karen Montgomery (D-14, Montgomery)
Delegate Victor Ramirez (D-47, Prince George’s)
Delegate Luiz Simmons (D-17, Montgomery)
Delegate Herman Taylor (D-14, Montgomery)
Delegate Michael Vaughn (D-24, Prince George’s)

G. James Benoit, Anne Arundel County Council Member
Will Campos, Prince George’s County Council Member
Joshua Cohen, Anne Arundel County Council Member
Nancy Howard, Ocean City Councilwoman
Glenn Ivey, State’s Attorney, Prince George’s County
George Leventhal, Montgomery County Council Member
Eric Olson, Prince George’s County Council Member
Ryan Spiegel, Gaithersburg City Councilmember
Bruce Williams, Takoma Park Mayor

Of the above state legislators, Delegates Bronrott, Hubbard, Hucker, Ivey, Ramirez and Vaughn voted in favor of the referendum and Delegate Montgomery was excused from the vote. That means that only 12 of 67 legislators who voted against the referendum, or 18% of the no-votes, have joined the anti-slots coalition.

Also notable is the fact that 13 of the 30 elected steering committee members are from Prince George’s County. Montgomery County, which is often described as a stronghold of slots opposition, only has nine members (counting the Comptroller). Absent from the list are all of the state’s County Executives.

The following state legislators voted against the slots referendum but have not joined the anti-slots campaign:

Senator David Brinkley (R-4, Frederick/Carroll)
Senator George Della (D-46, Baltimore City)
Senator Brian Frosh (D-16, Montgomery)
Senator Barry Glassman (R-35, Harford – a delegate at the time of the vote)
Senator Janet Greenip (R-33, Anne Arundel)
Senator Larry Haines (R-5, Baltimore County/Carroll)
Senator Andrew Harris (R-Baltimore County/Harford)
Senator Nancy Jacobs (R-34, Cecil/Harford)
Senator Allan Kittleman (R-9, Carroll/Howard)
Senator Alex Mooney (R-3, Frederick/Washington)
Senator E.J. Pipkin (R-36, Eastern Shore)
Senator Jamie Raskin (D-20, Montgomery)
Senator Bryan Simonaire (R-31, Anne Arundel)
Senator J. Lowell Stoltzfus (R-38, Eastern Shore)

Delegate Saqib Ali (D-39, Montgomery)
Delegate Susan Aumann (R-42, Baltimore County)
Delegate Charles Barkley (D-39, Montgomery)
Delegate Joseph Bartlett (R-4A, Frederick)
Delegate Gail Bates (R-9A, Howard)
Delegate Wendell Beitzel (R-1A, Garrett/Allegany)
Delegate Joseph Boteler III (R-8, Baltimore County)
Delegate Emmett Burns Jr. (D-10, Baltimore County)
Delegate Rudolph Cane (D-37A, Eastern Shore)
Delegate Robert Costa (R-33B, Anne Arundel)
Delegate Don Dwyer (R-31, Anne Arundel)
Delegate Adelaide Eckardt (R-37B, Eastern Shore)
Delegate Donald Elliott (R-4B, Carroll/Frederick)
Delegate William Frank (R-42, Baltimore County)
Delegate Ron George (R-30, Anne Arundel)
Delegate Jeannie Haddaway (R-37B, Eastern Shore)
Delegate J.B. Jennings (R-7, Baltimore/Harford)
Delegate Kevin Kelly (D-1B, Allegany)
Delegate Nicholas Kipke (R-31, Anne Arundel)
Delegate Ben Kramer (D-19, Montgomery)
Delegate Susan Krebs (R-9B, Carroll)
Delegate James Mathias Jr. (D-38B, Eastern Shore)
Delegate Susan McComas (R-35B, Harford)
Delegate Patrick McDonough (R-7, Baltimore/Harford)
Delegate Robert McKee (R-2A, Washington, since resigned)
Delegate Warren Miller (R-9A, Howard)
Delegate Heather Mizeur (D-20, Montgomery)
Delegate Peter Murphy (D-28, Charles)
Delegate LeRoy Myers Jr. (R-1C, Allegany/Washington)
Delegate Anthony O’Donnell (R-29C, Calvert/St. Mary’s)
Delegate Joseline Pena-Melnyk (D-21, Anne Arundel/Prince George’s)
Delegate Steve Schuh (R-31, Anne Arundel)
Delegate Christopher Shank (R-2B, Washington)
Delegate Tanya Thornton Shewell (R-5A, Carroll)
Delegate Michael Smigiel Sr. (R-36, Eastern Shore)
Delegate Richard Sossi (R-36, Eastern Shore)
Delegate Donna Stifler (R-35A, Harford)
Delegate Nancy Stocksdale (R-5A, Carroll)
Delegate Jeff Waldstreicher (D-18, Montgomery)
Delegate Mary Roe Walkup (R-36, Eastern Shore)
Delegate John Wood (D-29A, Charles/St. Mary’s)

Update:
In an interview on a Cumberland radio station, the Governor renewed his push for slots. According to the Sun:

Gov. Martin O'Malley said today that if a referendum on slot machine gambling fails in November, "it'll be back to the drawing board with a lot of unpopular choices, and I don't think any of us wants to go there."

Maryland AFL-CIO Backs Slots

In a development that surprised no one, both the Maryland/District of Columbia AFL-CIO and the Metropolitan Baltimore AFL-CIO announced their backing of slots today.

The Sun carried this classic quote:

"The main reason we're doing this is because of jobs, and that's what the hell we're supposed to do," said Ernie Grecco, president of the Metropolitan Baltimore Council AFL-CIO. He noted that racetracks such as Pimlico are "wall to wall" union facilities. "We're going to be contacting our members and asking them in November to get out there and vote for slot machines."

Jobs, jobs, jobs! Now that's a union guy talking!

The pro-slots side has been picking up momentum in the last couple months by earning support from the Maryland State Teachers Association, the Maryland Association of Counties and the Maryland Chamber of Commerce. But the AFL-CIO's endorsement does not mean that labor is monolithically pro-slots. MCEA resisted the state teachers board's pro-slots vote and one of the leaders of the anti-slots campaign is Chuck Graham, business manager of International Brotherhood of Electrical Workers (IBEW) Local 26.

As a fellow building trades guy, I cannot resist asking this question. If the IBEW is opposed to the casinos, do the other trades get to perform the electrical work if the casinos go up?

The Problem with Peter Franchot

The war of words between Governor Martin O’Malley and Comptroller Peter Franchot escalated yesterday. The Governor branded the Comptroller as a hypocrite for crusading against slots after voting for them in 2001. The Comptroller’s spokesman then referred to the Governor’s “attack” as “unusual” and “regrettable.” But what is truly regrettable is the nature of the Comptroller’s engagement in the state’s political debates.

From the start, Peter Franchot said he was not going to be your grandfather’s sort of Comptroller. He was going to be an activist, independent spokesman for Maryland taxpayers. Boy, I thought, this was going to be great. After all, activist independent spokespeople provide great fodder for bloggers!

Soon enough, the Comptroller proved good on his word. He questioned the need to hold a special session last year. He opposed the computer tax as soon as it was suggested. Senate President Mike Miller criticized Franchot and his staff for being “missing in action this entire year in terms of helping the state solve the budget crisis. ... Certainly, during the entire [22] days of the special session he was gone.” Soon after, Franchot became embroiled in an ugly battle with the Senate over his staffing practices and conduct in office. And that’s to say nothing about his opinions on slots!

Now we try to follow a tradition of constructive criticism on this blog. After our rip-roaring romps against MCDCC last year over its legislative appointment process, Paul Gordon suggested holding mid-term special elections and using a variety of ways to incorporate district resident input into MCDCC votes. When I found the Governor’s original special session package to be regressive, I laid out how to seize tax revenues from cheating employers who were costing the state millions. And when I opposed the computer tax, I suggested a package containing the Governor’s original upper-income tax rates, combined reporting and a corporate tax hike as a replacement.

It is very, very easy to criticize someone else’s ideas. It can be very, very challenging to craft a viable alternative. Franchot’s problem is not that he is an anti-slots liberal or that he butts heads with the Senate President. (After all, someone has to fight with Miller!) It’s that he does not supply us with a better way to deal with our problems. What does a progressive alternative to the things he criticizes look like? I’d really like to know, but he never tells us.

And the slots issue is becoming an excruciatingly difficult one. The latest state budget information holds that if the slots referendum is not passed, the state will face $600 million annual budget deficits forever. Regular readers know that I’m not a fan of slots. But after the legislature’s regressive special session tax package, the most likely alternative to slots money will be more sales tax increases or horrendous budget cuts, possibly to education, health care and transportation. These are really tough choices and any honest person who cares about both preventing slots and pursuing progressive economic policy is going to wrestle with them.

So what is the Comptroller’s recommendation? According to the Post:

Asked by a reporter how he would replace the revenue if the referendum is defeated, Franchot offered no specifics. He said the state should be nurturing the life sciences sector, industries that would presumably contribute more to the tax base upon its growth.

I’m sorry, Mr. Franchot. If you are going to earn my loyalty, you have to do better than that.

State Budget Crisis Will Get Worse Before it Gets Better

Courtesy of State Senator Rich Madaleno (D-18), we present a grim reality to MPW readers: the state budget situation is getting even worse.

Over the last two years, Maryland politics has been dominated by a debate over how to deal with the state’s “structural deficit.” This deficit is a long-term imbalance between revenues and spending created by income tax cuts in the 1990s and an expansion of education spending in 2002. The Ehrlich administration was able to defer the consequences of these decisions because of a strong economy and repeated diversions of transportation funds. But Governor O’Malley decided to deal with the problem head-on early in his term, leading to the deficit reduction package of last year’s special session.

The problem is the weak economy. Every time the legislature takes action to correct the deficit, the Maryland Board of Revenue Estimates reports revenue shortfalls. And so the legislature must redo its work. If the shortfalls are serious enough between General Assembly sessions, the Governor will probably have to make unilateral cuts until they return to Annapolis.

Senator Madaleno brought the latest 90 Day Report, a review prepared by the State Department of Legislative Services, to our attention. The report had this to say about future state budgets:

As shown in Exhibit A-1.6, although there is a cash balance of about $226.4 million in fiscal 2009, there is a gap of about $350 million when comparing ongoing revenue to ongoing spending. As noted, action at the 2007 special session reduced the projected $1.7 billion structural deficit by about $1.4 billion through a combination of new revenues and spending reductions. Reductions adopted at the 2008 session largely offset downward revenue revisions that were received in March 2008 but did not make additional progress in reducing the structural deficit. There is a potential cash shortfall of about $243 million between revenues and current services spending projected for fiscal 2010. The shortfall is expected to widen to nearly $600 million in fiscal 2011, which mirrors the structural deficit. This is due mainly to the downward revision of revenue by BRE [Board of Revenue Estimates] in March, to an actuarial error in retirement contributions which adds nearly $70 million per year in additional spending for teachers’ retirement costs, and in the financing of health care expansion, enacted by Chapter 7 of the 2007 special session, which adds $70 million in general fund spending in fiscal 2011.

Based on the assumption that the constitutional amendment to implement video lottery terminals is approved by voters in the fall of 2008, the projected cash and structural shortfall narrows significantly by fiscal 2013. It is estimated that revenue from video lottery terminals will add nearly $500 million in revenue in fiscal 2012, increasing to an estimated $660 million in fiscal 2013. If the constitutional amendment is not successful, the structural deficit is projected to remain at the roughly -$600 million level.

Exhibit A-1.6 is reproduced below.


These numbers are by no means necessarily the ones that will be used by the General Assembly in next year’s budget decisions. The revenue numbers in particular may be adjusted more than once by then. But in general, here’s how this might play out:

1. More tax hikes are very unlikely. The bulk of the problem will be dealt with on the spending side.

2. The spending increases passed in the special session, such as the establishment of a fund to clean up the Chesapeake Bay and a health care expansion, will be especially vulnerable. Legislators will say, “We thought we had the money for those things but it turns out we don’t. So we will have to wait until the money comes in before funding them.” College tuition freezes and transportation spending will also be endangered.

3. Both the special session and the 2008 general session largely spared the counties from cuts to state aid. That may not be the case next time. The counties are especially wary of any attempt by the state to pass on obligations for teachers’ pensions. Education aid may also be at risk. If aid cuts happen, they would greatly complicate county budget problems, especially in Montgomery County.

4. Slots proponents will be sure to exploit the new data, especially the 90 Day Report’s statement that “if the constitutional amendment is not successful, the structural deficit is projected to remain at the roughly -$600 million level.” Even anti-slots legislators will shudder at the prospect of replacing that amount of money, especially as election year approaches.

5. A $243 million deficit is projected for FY 2010, which will be decided next year. But a $596 million deficit is projected for FY 2011, which will be decided in 2010 – an election year. The General Assembly is surely tired of dealing with budget crises every year and will be tempted to take a break in 2009. But if they do that, the 2010 elections will be kicked off by a truly painful debate over even more tax hikes and/or spending cuts – a teeth-chattering prospect for every politician in Annapolis.

Putting a Gun to the Heads of Maryland’s Teachers (Updated)

The Baltimore Sun is reporting that Senate President Mike Miller is threatening education and teachers’ pension funding in an effort to get the Maryland State Teachers Association to support slots. This proves Eric Luedtke’s worries about this issue correct.

According to the Sun:

“They've got to help us either get some type of revenue, either taxes or the video lottery terminals, so we can continue funding public education at the rate I want it funded,” Miller said. "There's nothing more I want than to fund public education, but the beneficiaries of public education have got to respond in kind.”

But there is more:

The Senate president has also told union leaders that their failure to back the measure could force the General Assembly to seek another funding source for teacher pensions, including asking counties and school boards to foot the bill, a move that would almost certainly force severe cuts on the local level.

I have disagreed with the Senate President on slots in the past. But even more than that, I disagree with his approach to the relationship of slots and education funding. A common-sense, pro-education approach to this issue is to say, “I’m committed to education, now let’s go find the money.” Instead, Mr. Miller seems to be saying, “I’m committed to slots, now let’s figure out how to pass them.” This is not the kind of pro-education behavior I expect from my party in Annapolis.

Slots are now being marketed as a magical solution to the state’s budget problems. Some politicians are now telling us that if we pass them, we can pay for education, repeal the computer tax and pay for virtually any other kind of program that we want. But in fact, as surrounding jurisdictions increase their gambling programs in a mad, dice-and-whiskey-fueled gaming arms race, our revenue take will be far from certain. The only certainty is that license-holding corporations will be enriched beyond their executives’ wildest dreams, including those that are now teetering on the edge of bankruptcy.

The Senate President is a recognized master of politics and has survived as long as he has by knowing the sentiments in his chamber better than anyone – ever. He is pressuring the teachers by threatening education funding and holding up their grievance arbitration bill because he knows that voters respect them. Apple Ballots with one-armed bandits on them are almost as valuable as penthouse comps. But there is a price to this tactic.

First, the teachers waged a relentless four-year campaign to get their pension benefits increased, a fight that ended in 2006. By threatening to subject those benefits to county financing, Mr. Miller is signaling his willingness to endanger the teachers’ top legislative achievement of the decade.

Second, he is pressuring the state organization’s board to make a decision without input from a closely-divided membership. This does not take into account the internal realities of a union, which is in fact a political organization. No political organization likes dealing with divisive issues – for example, look at the General Assembly’s contortions on gay marriage, illegal immigration, the death penalty and, of course, slots. As any political organization works it way through a tough issue, it needs time, delicate negotiations and ways to assuage those who come up short. Putting a gun to the heads of the leadership, as Mr. Miller is doing, may earn him a temporary victory but is sure to create fury in the ranks and a desire for revenge against the Senate President, his pro-slots colleagues and even some of the state union leaders themselves.

In Montgomery County, we call MCEA the 800-pound gorilla. Don’t make it angry, Mr. Miller, because this gorilla has a long memory.

Update: MSTA's board voted last night to support the slots referendum. The Post has the story here. MSTA President Clara Floyd released this statement:

Today the MSTA Board of Directors voted to support passage of the November slots referendum.

Thanks to Thornton funding, we are making clear progress in raising student achievement across the state. Our greatest moral responsibility is to continue this progress by ensuring that educators and schools have the resources they need to give every child access to great public schools.

The referendum establishes an Education Trust Fund and dedicates half of future proceeds to our public schools. It provides Maryland with an additional source of funding, beginning with licensing fees in early 2009.

Because of our state’s precarious fiscal outlook, if this referendum fails, students, teachers and support staff will be left with outdated facilities, larger classes, outdated textbooks and shortages of materials. School systems will be left with fewer resources to recruit and retain the best teachers and support staff.

Although this referendum is a necessary component to curing our state’s long-term fiscal woes, it is not sufficient. MSTA will continue to advocate strongly for other progressive and sustainable revenue alternatives to provide adequate funding for public education.

Despite the state board's endorsement, readers should not assume that all local affiliates will now do everything in their power to support slots. Judging from the controversial nature of the decision and, especially, the way in which it was made, some local affiliates are bound to work harder for the referendum than others.

Stop Slots Maryland Promises Aggressive Campaign

Aaron Meisner, Chairman of Stop Slots Maryland, promised a group of MoCo activists today that his organization would wage an aggressive campaign to defeat the slots referendum. What is his plan and will it work?

Meisner made his remarks at a public meeting of Progressive Neighbors, a liberal group based in Silver Spring and Takoma Park. He started by noting that most recent slots referenda have failed, a point previously demonstrated by Free State Politics blogger Eric Luedtke. So while slots have a 60%+ favorability in Maryland polls, victory is possible.

"We can win, but it won't be easy," Meisner said. "It's not easy to transform a grass-roots lobbying organizations into a statewide campaign. It's taking time to shift gears." Meisner indicated that the organization is recruiting political operators with statewide campaign experience in Maryland and is in heavy talks with several religious groups. He described the evolving coalition as a group of "strange bedfellows" including secular progressives, rural values voters and religious organizations. "It's a big challenge to get organized," he admitted.

Meisner did not get into specifics, but upon reading a hard copy of this blog post, he indicated that the new plan would resemble what we have outlined. Overall it seems that Stop Slots Maryland is just getting moving. As he says, they have a real challenge: radically changing the organization in the midst of waging its most critical and difficult campaign yet. It is very, very tough for any organization to change so much while on the move, but that is what has to happen for them to win.

Right now, the big questions on this issue are:

1. Will the Governor campaign in favor of the referendum?

2. How will Stop Slots Maryland raise the money needed to win?

3. How will the organization liaison with the street-level activists who will be critical to victory?

Elbridge James, President of Progressive Maryland, hinted at the answer to a fourth big question at the same meeting. When asked whether Progressive Maryland would "help lead the fight against slots," James said that the issue would be decided at a board meeting of the group in late January. "The question is will we oppose slots vigorously, oppose slots passively or not oppose them," he said. While James declined to provide a hard prediction of what Progressive Maryland would do, few of us left the meeting believing that the group would fight hard against slots. Several of the group's union affiliates may in fact support slots because of hopes to unionize casino workers, perform the construction work, or gain more public funding. This creates a significant possibility that Progressive Maryland will sit out this fight, thus lessening the chances of slots opponents.

Pay attention to this one, folks. The fighters are still in their robes, bouncing in their corners. Michael Buffer is only now reaching for the mike. I'd advise you to place your bets, but ah... maybe that's the wrong metaphor.

How to Beat Slots

Failing to pass an outright bill after many years of debate, the Maryland legislature has sent the slots issue to the voters. Next November, the issue will finally be decided by referendum. Sixty-eight percent of Maryland residents supported slots in a recent Washington Post poll and the gambling industry is set to pour millions into a pro-slots advertising campaign. So the Free State will soon see beeping machines entitled “Mike Miller’s Mega-Bucks” and “O’Malley’s O’Millions,” right?

Wrong.

As Eric Luedtke points out on Free State Politics, the gambling industry has won only 5 of 16 ballots since 2004, and only 2 of 6 ballots since 2006. Past experience shows that it is possible to defeat the gambling industry even when they start out with a lead in the polls. But it will take disciplined organization, cooperation among unlikely allies, a bit of money and unprecedented volunteer efforts to get the job done.

There are three constituencies that oppose slots, each for different reasons. None of them has a great deal of experience in working with the others. They are:

Secular Progressives
These individuals are Democratic activists who are social and economic liberals and have contributed money and time to past liberal campaigns. They live disproportionately in Montgomery and Prince George’s Counties but play important roles in many local Democratic Parties across the state. They oppose slots because they view them as regressive and inherently promoting corruption (especially via political contributions). They would play an important role in any pro-slots coalition, but they are insufficient in numbers to win a referendum by themselves. (The recent special session showed the limits of their power as Montgomery County’s delegation expended their political capital on limiting income tax increases on the rich – hardly a liberal priority.)

Religious Groups
Religious groups oppose slots because they see them as morally wrong. In their view, slots promote crime, vice, addiction and a general decline in the culture. Importantly, religious organizations from all parts of the political spectrum – from the most liberal to the most conservative – detest slots. While secular progressives have occasionally worked with liberal religious groups, they have often been on the opposite side of conservative groups. (See Montgomery County’s recent debate on protections for transgender people.)

Neighbors of Slots Sites
Slots are scheduled to be located at five sites: Worcester County on the Eastern Shore (probably the Ocean Downs race track), Anne Arundel County (probably at Laurel Park race track), an unspecified site in Baltimore City, Allegany County (probably at the state-owned Rocky Gap Lodge), and an unspecified site in Cecil County in the northeastern corner of the state. Many leaders in those areas, including the mayor of Ocean City and the Anne Arundel County Executive, oppose slots. It is reasonable to believe that immediate neighbors of the sites would oppose traffic-generating, crime-creating casinos near their homes. Many residents in these areas are probably Republicans. Some may not be regular voters. But since they are now in the target sites of the gambling industry they may be ready and willing to fight back.

None of these groups can defeat organized gambling alone. But if they unite and focus on their common enemy, they can triumph.

In order to win, these groups must work cooperatively inside a campaign structure set up for the express purpose of winning the referendum. That structure does not currently exist and must be created as soon as possible. It is not enough to simply expand Stop Slots Maryland, the group that has resisted slots up to now. That group has engaged successfully in legislative lobbying, but that is a fundamentally different task than grass-roots organizing. A winning structure would bear a significant resemblance to a Presidential state organization. It must have coordinating leadership but also significant local, perhaps even precinct-level, autonomy. It must give local volunteers the guidance, resources, money and expertise to enable them to wage effective house-to-house campaigns in their own neighborhoods. The gambling industry has outspent anti-gambling activists by seven-to-one in prior campaigns, so the anti-slots forces can only win through organized people power.

Here is what a winning anti-gambling coalition looks like:

State Leadership
The state leadership’s primary functions are to raise money, coordinate (but not control) local activities, supply resources (including training), deal with state-level media and run the campaign’s primary website. The state leadership will not directly control strategy on the ground – that is the domain of legislative district captains.

The state leadership committee should be composed of no more than a dozen prominent anti-slots leaders, possibly supplemented by a broader committee for symbolic value. Each of the three constituent groups must be represented. It is vitally important that none of the three constituencies be relegated to second-class status; otherwise it will lose interest in the campaign. It is also important that the state leadership not be too closely identified with any single politician. If it is, it will succumb to geographic, political and personal rivalries. After all, these are politicians we’re talking about.

The state leadership committee should consider hiring an experienced political organizer as an executive director with a monthly salary plus expenses. This individual will be extremely busy managing the website, directing cash flow, placating occasionally jealous politicians, traveling across the state and otherwise keeping the campaign on track.

The most important task of the state leadership is to raise money. In the 2006 gambling campaigns in Arkansas, Nebraska, Ohio, Rhode Island and South Dakota, the Baltimore Sun reported that a total $54 million was raised by both sides. The gambling industry accounted for 90% of this total. Applying these figures to Maryland on a per capita basis, the Free State’s anti-slots activists would need to raise $1.7 million to match the record of the other campaigns. A quick way to begin would be to ask every anti-slots politician in the state to contribute $4,000 from his or her campaign account. If 50 politicians heed this request, the state leadership would have $200,000 which could immediately be applied to raising more money from the public. An additional benefit would be to identify which politicians were truly anti-slots, thereby revealing others who were anti-slots in their rhetoric but unwilling to back it up with their own campaign funds.

The campaign website is a critical gateway to potential volunteers. It must contain extensive FAQs on the issue, identify supportive leaders, allow monetary contributions (including through credit cards), contain printable handbills and other literature, report news items and most importantly, connect the visitor to their relevant district captains. Each district captain should have his or her own web page through which to communicate about local activities. It is very important that the website not only inform and persuade, but also give the visitor the motivation and tools to become an activist in his or her own area.

Each of the individual state leaders should also tend to their own constituencies. A politician from Montgomery County, for example, could activate his or her own network of campaign volunteers for anti-slots activities. A church leader could initiate talks with nearby religious groups. A conservative leader could seek out resources from national conservative groups that oppose gambling. Each of them could initiate media coverage from local newspapers. The important thing is that these efforts should be coordinated with ground-level activities through district captains as well as with other state leaders. And each must focus on opposition to gambling as opposed to other elements of their agendas – an easier task to describe than accomplish.

District Captains
W. Minor Carter, a lobbyist for Stop Slots Maryland, recently told the Baltimore Sun, “We need a lot of little heroes.” Carter is correct. Anti-slots activists are more motivated and more numerous than pro-slots activists (if there are any), but they must be organized for success. This is the critical task of the district captains, each of whom is selected by the state leadership to manage grass-roots efforts in one of the state’s 47 legislative districts.

The district captains will identify and enroll activists, create and schedule work assignments, and implement locality-specific activities designed to educate voters and turn out the anti-slots vote at referendum time. Each will use a page from the statewide website to provide contact info to prospective activists, announce work assignments and other events, and exchange info with volunteers through attached listservs. District captains will apply to state leadership for literature, access to politicians, local leaders and other resources, and general guidance. But actual work decisions will be made by the captains and their teams and must be customized to local circumstances. For example, a district captain in a heavily Latino area may want to distribute Spanish-language literature. Another district captain near a proposed slots site may want to saturate neighborhoods within a two-mile radius. Yet another district captain may want to forge a close alliance with a locally-prominent religious organization. These decisions cannot be dictated by Annapolis.

While the state leadership should not micromanage the district captains, it is vitally important that they provide the captains with training. Soon after the captains’ selection, the state leadership should arrange a training session in grass-roots organizing provided by experienced political campaign operators. Literature drops, housecalls, training volunteers, scheduling assignments, media relations and other common campaign activities should all be covered extensively. Follow-up sessions, including joint briefings and info exchanges, should occur regularly over the course of the campaign.

Religious groups may want to set up parallel structures because congregations often cross district and county lines. Some may want to produce customized literature reflecting the priorities of their congregations. Others may want to work with closely allied non-profits. Still others may want to bring in assistance from national organizations. These decisions are best left to religious leaders but should be communicated to relevant district captains. On a campaign involving this many different groups in so many spheres of influence, communication by itself will be a significant challenge.

Measurement and Accountability
The state leadership committee and the executive director must strike an appropriate balance between respecting local autonomy and demanding results. Promulgating a measurement system at the start of the campaign would make clear the expectations of district captains – perhaps the sole part of the campaign’s structure under the discretion of the state leadership. Possible measures include number of handbills distributed, number of volunteers coordinated, and number of man-hours worked. Some underperforming district captains may need to be replaced, especially if they fail to produce significant numbers in a jurisdiction with potential (such as Ocean City or Montgomery County). Other district captains may need to be supplemented with aid from nearby jurisdictions. While the district captains should have lots of leeway in deciding how to meet performance measures, the state leadership is responsible for ensuring that those measures are actually realized.

Maryland has rarely seen a grass-roots issue operation of the nature described above. But anti-slots activists need one now. The clock is ticking. Gambling corporations and their allies are already raising money, reserving ad time, filming commercials and printing direct-mail pieces. If the opponents want to maximize their chances for success, the time for counterattack is now.

Why Progressives Should Not Punish Legislators Who Voted for the Slots Referendum

In two of the most critical, hotly contested votes in at least fifteen years, Maryland’s state legislators recently voted to send the issue of slots to a referendum. Anti-slots voters howled with betrayal. Gambling bosses munched their cigars in glee and stroked the cash in their wallets. The forces of evil massed at the gates of I-95, poised to let loose the dogs of addiction and vice into the Free State. So naturally, liberals should punish the traitorous legislators who signed Maryland over to the armies of immorality. Right?

Wrong.

Here are five reasons progressives should not punish legislators who voted for the slots referendum:

1. A special session collapse would lead to more tax hikes and/or spending cuts later

Throughout the special session, Senate President Mike Miller repeatedly warned that failure to pass a slots referendum might lead to general impasse. If that happened, the legislators would have to take up deficit reduction again in the general session in early 2008. But since new revenue collections would be delayed from the end of 2007 to the summer of 2008, the hikes would now have to be about $500 million greater. The most likely source of further tax hikes would be related to the sales tax as Montgomery County’s delegation would no doubt block any further attempt to raise income taxes on the rich. Alternatively, spending cuts would inevitably affect education aid and state government staffing. No wonder labor unions were urging wavering legislators to support the referendum.

Would more sales tax hikes and reduced education spending really be in the interest of progressives? Of course not, so the legislators faced a “lesser-of-two-evils” choice. In fact, this pattern of decision-making was the hallmark of the entire special session.

2. Relationships with the Governor and the leadership are important

A politician’s effectiveness is to a great degree based on relationships with others, the pursuit of mutual gains and resulting negotiating leverage. In Annapolis, the most important relationships are with the Democratic leadership and the Governor’s office. The leadership has exclusive control of committee assignments, committee chairmanships and, by extension, bill appearances on the floor. The Governor has unusually tight control over budgeting as well as the giant apparatus of state government. Every legislator has to negotiate this set of relationships to accomplish his or her priorities as well as to meet the needs of his or her district. Politicians without relationships become pariahs, howling at the moon while the rest of the pack feasts on the night’s catch.

The slots referendum vote was, to this point, the most important vote in the Governor’s political career. It was also a test of the Democratic leadership’s ability to work together (not always an easy task between the two chambers) and clear the table of troublesome budget problems prior to the next round of elections. Any legislator who rejects both the Governor and the leadership in their hour of greatest need runs the risk of ruining their ability to deliver grants, aid, transportation projects and general services needed by their district. After all, should such a legislator later approach the Governor for help, he or she might well be the recipient of an icy glare and a cool, “Where were you when I needed you?”

Again we see a “lesser-of-two-evils” decision. Don’t blame those legislators who acted to preserve their effectiveness on other liberal priorities and constituent service.

3. No one demonstrated ideological purity

One of the great ironies of the special session is the behavior of some of Montgomery County’s “liberal” delegation. The tax hikes that encountered the greatest resistance among such members were the Governor’s increased income tax rates on Maryland’s wealthiest residents. Their opposition was based on competitiveness with Virginia, but why shouldn’t the same arguments apply to the sales tax or the tobacco tax? Why the selective outrage?

Some of the legislators who opposed slots worked to reduce the added taxes on the rich in the Governor’s income tax proposal and did not utter a peep of protest against the $730 million sales tax hike – yet they still call themselves “progressives.” If you are looking for ideological purity, you may find it in church, but you will not find any in Annapolis.

4. Slots will keep coming back unless they are defeated with a referendum

Slots have been on the verge of passing for years. In 2005, both chambers of the legislature approved slots bills but could not reconcile them. Anti-slots activists have known a painful truth for years: all it takes is a handful of changed votes to get a pro-slots majority in the legislature. Given the rates of turnover in state legislative elections, it is possible that sooner or later slots will finally pass.

Everyone knows that a vampire will not die until a stake is driven through its heart. Defeating slots at the ballot box may be the only way to destroy the creature once and for all.

5. Heed the people

There have always been two sets of arguments around slots. First are the economic arguments. Some consider gambling fees a voluntary levy (putting aside addictions) and therefore superior to involuntary taxes. Others say gambling revenues are at least matched by health and welfare spending (and more intangible costs) associated with remedying the problems of addiction. Second are the moral arguments. Some see gambling as a victimless crime, or not a crime at all, and say the state has no business outlawing it. Others criticize gambling as inherently immoral and destructive of our culture.

Those who argue against a referendum are implying that the citizens of Maryland are too ignorant to weigh the economic arguments and are too corrupt and/or weak-minded to evaluate the moral arguments. These sorts of decisions are beyond the capabilities of average citizens and can only be decided by those who manage to get elected. Is this really what progressives think about the masses?

Why should progressives fear democracy? If the reasons for opposing slots are truly superior, Maryland’s progressive community is more than capable of triumphing at the ballot box. And victory is entirely possible. While polls suggest that a majority of Marylanders favor slots, anti-slots activists are much more motivated than pro-slots voters. Liberals may very well win by getting out their vote in anti-slots strongholds like Montgomery County, Prince George’s County and Ocean City. If that happens, perhaps those who voted for the referendum should be thanked by allowing the people to slay the monster once and for all.

Adam Pagnucco on the Budget: Part II

Part Two: Is the Governor’s Plan Progressive or Regressive?

First, let’s finish looking at the remaining elements in the Governor’s proposal. Then we will be able to determine the plan’s relative reliance on progressive and regressive measures.

Corporate Income Tax

The Governor proposes to increase Maryland’s corporate income tax rate from 7% to 8%, raising $110 million in FY 2009. The new higher rate would still be lower than Pennsylvania (9.99%), the District (9.975%), New Jersey (9%), West Virginia (8.75%), and Delaware (8.7%), but higher than North Carolina (6.9%) and Virginia (6%). Given the facts that Maryland could easily raise its corporate income tax even more and still be close to most of its neighbors and that 66% of Post poll respondents approved of this hike, the state’s business community should be relieved that the increase is not larger.

Corporate Income Tax: Progressive, 7% of Package

Expansion of Sales Tax Base

Maryland’s sales tax does not apply to most services. According to the Federation of Tax Administrators, of 168 potential services to be taxed, Maryland taxes just 39. The District of Columbia taxes 70 and Virginia taxes 18. The Governor proposes to apply the sales tax to tanning salons, health club membership, massage services and real estate management, bringing in $74 million in FY 2009.

Because there are well over 100 types of services that would still be untaxed, there are vast opportunities for more revenue in this category. Jeffrey Birnbaum and Alan Murray’s brilliant book Showdown at Gucci Gulch (which should be required reading for all tax policy-makers) tells the story of how Congressman Dan Rostenkowski, Senator Bill Bradley and the Reagan Administration teamed up to lower marginal income tax rates by closing loopholes and exemptions in 1986. A similar approach to the sales tax might at least partially ameliorate a rate increase.

While real estate management might be passed on partly to renters, it is hard to say that the other services are used disproportionately by the poor. Overall, I assign this a neutral impact.

Expansion of Sales Tax: Neutral, 4% of Package

Property Tax and Sales Tax Relief

The Governor actually cuts two taxes in his proposal, losing revenues for the state. He proposes reducing the property tax rate by 3 cents per $100, costing $54 million in FY 2009 (and much more in later years). He also offers two sales tax-free weeks on clothes and two tax-free weekends on energy efficient appliances, costing $13 million per year.

The property tax decrease will disproportionately benefit people whose wealth is concentrated in their homes, many of whom are seniors or middle class. The tax-free periods will tend to benefit the poor and middle class. Since both measures cost the government money rather than raise it, I list them as offsets to the regressive features of the proposal.

Property Tax and Sales Tax Relief: Regressive Reduction of 4% of Package

Corporate Loopholes

The Governor would like to close two corporate loopholes. First, he would like to implement “combined reporting,” which would make it more difficult for corporations to reduce Maryland taxable income by assigning it to other states. Second, he would like to do away with commercial real estate owners’ use of shell companies to sell property without paying transfer taxes. Both measures are expected to raise a combined $36 million each year.

Corporate Loopholes: Progressive, 2% of Package

Slots

The Governor originally proposed a slots plan which he said would be loosely modeled on a bill passed by the House of Delegates in 2005, which would have authorized 9,500 machines. He estimated the plan would produce just $27 million of revenue in FY 2009 but would eventually bring in $550 million by FY 2012.

Opponents depict slots as regressive, alleging that poor people would gamble higher proportions of their income than the rich. Is it possible to have “progressive” gambling? Instead of relying on slots, the state could sell licenses for table games to luxury hotels requiring fifty dollar minimum bets. Wealthy gamblers could be seduced by endless champagne, sushi and Godiva chocolates. Some might even come in from Pennsylvania and Virginia which (so far) do not have table games. But such a proposal would fail because it would not generate as much revenue as the “one-armed bandits” and slots opponents tend to oppose all gambling, not just machines.

There is now a chance that the legislature will propose a slots referendum to be voted on next year rather than a slots bill. If that happens, there may be even more machines (perhaps 15,000) to compensate for the delay in the revenue stream. Sixty-eight percent of Post poll respondents supported slots, giving any referendum a fair chance of passage. If the referendum fails, state politicians may have to consider more taxes and/or cuts in 2009, something none of them wants to do so close to an election year. In any case, slots produce more money in out years than in the near term.

Slots: Regressive, 2% of Package (Rising to 24% of Package in FY 2012)

How Progressive is the Package?

Our calculations of the Governor’s deficit reduction proposal in FY 2009 are:

Amount in $ millions (Percentage)

Progressive Measures

Income Tax Restructuring: $162 (10%)
Corporate Income Tax Hike: 110 (7)
Closing Corporate Loopholes: 36 (2)

Total Progressive: $308 (18%)

Neutral Measures

Budget Cuts (non-education): $268 (16%)
Sales Tax Expansion: 74 (4)

Total Neutral: $342 (20%)

Regressive Measures

Sales Tax Hike: $730 (43%)
Tobacco Tax Hike: 170 (10)
Lower Education Spending Growth: 169 (10)
Slots: 27 (2)
Offsets for Property Tax,
Sales Tax Relief: -67 (-4)


Total Regressive: $1,029 (61%)

Total, All Measures: $1,679


The deficit reduction package is primarily regressive, principally because of its heavy reliance on the sales tax. The situation would be worse in FY 2012 as slots rise to 24% of the deficit reduction package, making it 70% regressive overall.

In Part Three, I propose an alternative revenue raiser that could be used to reduce the plan’s reliance on regressive solutions.

Adam Pagnucco is the Assistant to the General President of the United Brotherhood of Carpenters and has been employed in the labor movement since 1994. The views in this column are his alone and do not represent official statements from the union.