Question 7 – Page 2

Empty lot, empty promise from a state empty of opportunities for business?

Countering the claim that approving Question 7 would lead to thousands of jobs in Baltimore City, those who oppose O’Malley’s measure wonder if that’s just another empty promise.

It’s totally appropriate to point out that the general situate was approved in 2008 when Maryland voters originally approved slots. So Harrah’s has had almost four years to put something together in a time period where two other casino facilities were built and one renovated. So why did they wait? Was the deal not made sweet enough by the state; not enough of a cut?

Meanwhile, the governor who called the Special Session so we could spend our fall discussing how many millions would come out of state taxpayer pockets and whether they would come as a result of games of chance or future tax increases continues to “lead” a state which remains in the bottom 10 in terms of business climate. Guess who publicized this statistic? (Three guesses, first two don’t count.) Does the name Larry Hogan ring a bell?

The Change Maryland head noted:

Since 2007, in addition to losing 6,500 small businesses, Maryland has lost 31,000 residents of tax-paying households and 36,000 jobs. It’s no coincidence that our lopsided tax code is causing this weakness in economic performance.

More troubling is that our immediately neighboring states (Delaware, Pennsylvania, West Virginia, and Virginia) rank anywhere from 14th to 27th. When compared to Maryland’s 41st ranking, these other states look like a business paradise. Virginia does it without the benefit of casinos, while the others already have the table games Maryland seeks because they showed more foresight in creating an attractive climate for gamblers. This seems to match their practice in trying to attract and retain private-sector employers.

Unfortunately, the Maryland Constitution doesn’t allow voters to have a say when it comes to fiscal issues because they’re not subject to the same referendum laws other bills passed into law are. Perhaps that’s a good thing since otherwise we may rival California with the number of ballot issues we would face. A further disadvantage, though, is the fact we have the same Democratic control of the state for another two years, without a chance for a mid-term correction like many other states have.

We’re stuck for another two years with a General Assembly similar to the one which shirked its duty back in 2007 by punting the gambling issue to voters yet is only too happy to tax citizens and punish businesses in order to redistribute wealth in both directions: from rich to poor through their fiscal schemes and back from poor to rich via gambling.

In order to get out of the bottom 10 for business climate and bring sanity to the gaming industry, change is truly necessary. The first step is rebuffing Martin O’Malley and slapping down his overly ambitious agenda by defeating Questions 4 through 7.

Question 7: Money vs. money

Regardless of supporters’ pleas that money that’s currently fleeing to West Virginia will, as if by magic, return to Maryland if we only allow more gambling and another casino, the question about Question 7 remains: who do we believe? Their question about what Maryland loses can be flipped on its head and asked: who gets the real benefit?

Of course, those who oppose Question 7 call it:

…a massive rip off for Maryland families because it shifts hundreds of millions of dollars in tax cuts to multi-millionaire casino operators while sticking working families with a $260 million tax increase and shortchanging Maryland teachers and students.

The questions really come down to those of trust and responsiveness.

Back in 2008, when the law was first passed by Maryland voters, a number of parameters were set. The two most key were setting the locations for the five proposed casinos and the cut each entity would get. Many said then the proportion which was slated to go to casino operators was too low, and that theory may have been borne out when few takers were found for the various slot barn licenses. The state figured all five facilities would be online by now; instead just three (Perryville, Ocean Downs, and Arundel Mills) are in operation.

This referendum allows the state to change the proportions for return to licensees to suit particular situations as well as correct what some obviously perceived as an oversight, with a proposed facility near Virginia and Washington, D.C. But it’s not like the casino in Charles Town wasn’t there when the original bill was passed.

It points out the weakness I warned about when the Constitutional amendment was considered in 2008: there’s very little flexibility to adapt to changing conditions. Had the General Assembly done its job like it was supposed to, Maryland may well already have table games and whatever number of locations the market could bear. Instead, we’ve learned the hard way that there isn’t much of a market for slot machines in rural areas (Perryville and Ocean Downs are lagging) and we’ve given other states a huge head start on table games. All these could have been addressed by the General Assembly but they punted.

Indeed, supporters of Question 7 may make it seem like we’re leaving millions of dollars on the table – a very dubious proposition when you consider the total costs of gambling. Virginia seems to do just fine without casinos. But voting no also rebuffs a General Assembly which hasn’t done its job. The opponents make a good point when it’s stated that, while the money raised by gambling goes into the educational pot, the money is taken away at the other end and sucked into that black hole known as the General Fund.

The 2014 ballot should have a provision which removes the section of the Maryland Constitution specific to slot machines and instead authorize casinos in the general sense that horse racing tracks and the Maryland Lottery are already allowed. Then any needed changes can be made during a regular or special General Assembly session rather than waiting until November of an even-numbered year (while other states progress merrily onto table games and sports betting.)

Frankly, the only people who seem to be profiting off this particular battle are the political consultants, advertising agencies, and media outlets who put out and broadcast the dozens of spots we see during the week on both sides. If we vote yes, MGM stands to gain millions; if not, Penn National maintains its market share. Personally I’d rather the state concentrate on good manufacturing jobs which actually create things than entertainment jobs which depend on the regressive tax gambling truly is.

In Maryland, the gambling genie is already out of the bottle. Honestly I have no issue with the ability to wager, which doesn’t cost me more than the few dollars I occasionally spend on Powerball or MegaMillions tickets. But if they were going to adopt casino gambling it should have been done right. Let’s step back, take two years to write the proper legislation, and remove voters from the equation in 2014.

Who really gets the Maryland casino jobs?

One of the selling points proponents of Question 7 have tried to stress is job creation, claiming that 12,000 positions in the areas of constructing the new facility, working inside, and tourism in general would open up once the issue is passed.

But a serious question has been raised on the construction job aspect: who will get them? It’s a question posited on a mailer I obtained yesterday.

If you’ll notice in the first box on the back side (the second page of the .pdf file), there’s a question as to who can actually take these jobs. Quoting from the mailer:

Given that developers will operate under a ‘Project Labor Agreement’ that limits who can be employed during construction, most able-bodied Maryland workers will never even have a shot at getting a job there.

In other words, non-union contractors need not apply. Is it any wonder it was the building trades union who sent me a letter to convince me to support the measure passing the Special Session? (They dropped a lot of money on that effort, according to the Baltimore Sun.) The most cynical among us might do the math: more union jobs = more union dues = more money into Democrats’ coffers.

And then we have the promise of permanent jobs. Certainly there will be jobs to be had at a new facility, as it will host its share of service workers to maintain the video slots, run the table games, and serve food and drinks. Yet there’s a legitimate concern about jobs being lost in other nearby gaming venues such as Maryland Live! in Anne Arundel County. The opening of Maryland Live! has already prompted the management of the Hollywood Casino in Perryville to ask for the removal of 400 slots so their facility doesn’t look too empty and unused.

While the National Harbor facility may draw some business away from the Hollywood Casino in Charles Town, West Virginia and perhaps entice a few gamblers up from Virginia and out of Washington, D.C., the net effect on Maryland’s existing facilities is likely to be detrimental as the overall gaming participation growth is only predicted at 1 to 2 percent. Adding more Maryland facilities will shrink the pie for existing casinos more than it would add to the market, and as business declines elsewhere facilities like Maryland Live!, the Perryville Hollywood Casino, and Ocean Downs will have no choice but to shed jobs.

And let’s talk money. Oddly enough, arriving in my mailbox yesterday was another mailer which pointed out an obvious flaw covered in several other venues: money spent by gamblers in the hope of garnering a better education for our crumb-crunchers is really only replacing what’s already taken out of the general fund. So the net effect of Maryland’s education system may well be zero.

Yet the Diamondback piece also has some interesting quotes from Comptroller Peter Franchot, who chastises his fellow Democrats for hopping aboard the gambling train:

It’s a sad exercise to watch Democrats approve gambling, which everyone knows is a regressive tax. [Gaming] is a predatory industry.

It’s also likely to be another failed effort in a state which tried and failed to enact punitive taxes on millionaires, who simply laughed and moved to a state with lower taxes. Unfortunately, poor people – who are already stuck with underperforming schools which won’t see any true benefit from the money they’re wishing away – don’t readily have as many options aside from not gambling at all. And who’s going to pass up the allure of easy money?

If only they could get more benefit from the money being spent on passing or killing Question 7.

Aggressive ‘No on 7’ campaign continues with pair of ads

Pounding home the main point that there’s no guarantee local jobs will be created or the money will go to education, the advocacy group against Question 7 released a pair of advertisements late last week. The first is dubbed ‘Not Really’ and the second ‘Blatantly.’

It will be interesting to find out where the money to finance these ads is coming from (the Sun story used in the latter commercial points to Penn National, which owns the Hollywood Casino in Perryville) as my presumption would be that both the education and construction unions are bankrolling the pro-Question 7 effort with an assist from MGM, the gambling concern who would build the new National Harbor casino.

The Sun op-ed also notes:

In reality, Question 7 is a massive giveaway to the casino owners at the public expense. It guarantees steep tax cuts for most of the state’s casinos and allows the possibility for even greater reductions in the future. The Department of Legislative Services estimates that the casino owners stand to reap a $525 million windfall if Question 7 passes.

I know, it’s hard to believe that Democrats voted for a tax cut but that change in direction is tempered by the fact Democrats don’t necessarily mind using the tax code to regulate behavior. If Question 7 is approved, you could actually give more to the state’s education fund by playing (and losing) at certain casinos rather than others, and give less to the state by losing at table games – which would have a 20 percent tax rate – than video slots. (See page 51 of the bill.)

In all honesty, my opposition to Question 7 isn’t based on a prudish desire to eliminate gambling, but that the Maryland General Assembly be forced to do its job and not punt the specifics of the issue to voters. As I’ve said before, all they really had to do was amend the Constitution (more specifically Article III, Section 36) to allow casino-style gambling in addition to lotteries. Just repeal Article XIX and substitute appropriate language in Article III, and let the General Assembly have at it. They would likely pull all the same tricks anyway, but they themselves would be accountable to voters for this and all their other actions; meanwhile, they could be more adept at changing rules for a fast-moving industry.

The ‘No on 7’ campaign begins

First out of the gate in terms of issue advocacy is the “No on 7” group which announced its presence Thursday with a new website and television ad.

Their chair, Jacqueline Goodall, had this to say about their effort:

We are excited to get the facts out about the merits of Question 7. This ad is only the beginning of a serious effort to inform Maryland voters on the consequences of the proposed gaming expansion. The costs of another casino in Maryland exceed the benefits, and voters do not deserve to be misled by false promises and misinformation.

Question 7 is the result of a rushed special session and secret negotiations that have ignored the concerns of our residents and communities statewide. Between now and November, we look forward to an open and honest debate on the facts.

The facts, as they have them, pay particular attention to the tax rates which will be paid by casino operators and lack of transparency in the process. Compare this to the jobs-based approach being used by casino proponents and they could have an uphill battle.

They don’t need to convince me to vote against Question 7, but my opposition is more to the ignorant process the state is using by the need to change the Constitution every time another casino or table games are needed. Isn’t that what a General Assembly is supposed to do? Instead, they get the fun of changing tax rates at whim and moving the money promised to education around – and they didn’t need the voters to do that.

What should have been done in this General Assembly was to submit a Constitutional change rescinding the restrictive language passed in 2008 and replace it with language similar to that which allowed the Maryland Lottery. That agency has the freedom to change games at will, select whatever outlets it wants, and so forth. No need to vote on whether the corner store can start selling Powerball tickets.

If we vote against Question 7, perhaps the General Assembly can get to work on rectifying the problem knowing that voters are watching what they do.

It’s also interesting to note that one of the largest voting blocs in the state – Democrats in Montgomery County – has a leadership which, on balance, opposes the bill, according to David Moon and Maryland Juice. Needless to say, they’re unanimously supporting gay marriage and in-state tuition for illegal aliens, so the split on gambling is quite intriguing. I guess they really don’t want tax cuts for anyone, even casino owners.

Meanwhile, we now know the air war has been joined.

Odds and ends number 57

A lot of little (and big) stuff to talk about in this edition of odds and ends. I want to start local as a follow-up to something I wrote last weekend about the Wicomico Board of Education. Wicomico GOP Chair Dave Parker believes the headline originally placed in this Daily Times story was “misleading,” and it was indeed changed online to that which you see in the story.

The original, however, was “Wicomico County GOP committee protests Board of Education nominee.” Yes, the Daily Times got that one wrong – the protester was me, speaking on my own behalf. Maybe Jennifer Shutt is familiar with my work and I suppose I have my share of influence, but I don’t speak for the committee as a whole.

Now that I have that cleared up, I can add a note sent to me by the “pretty in pink” Delegate Addie Eckardt, whose Crab Feast & Sausages fundraiser is rapidly approaching – Sunday, September 9 is the date. It’s going to be held at J.M. Clayton’s in Cambridge from 5:30 to 7:30 p.m. and the cost is $50 per person.

But if you’re a local Republican and don’t have the $50 lying around, you can still help. Our erstwhile headquarters coordinators Cynthia Williams and Bonnie Luna are looking for a few good men (and women, too) to staff our party headquarters from 10 a.m. to 8 p.m. daily and 10 a.m. to 4 p.m. on Saturday. (We’re not opening on Sundays.) You can stop by the headquarters at 800 S. Salisbury Boulevard or call (410) 742-0308. We’re not picky in that respect.

Libertarian Muir Boda was kind enough to pass along a note regarding candidate forums he’s been invited to. One in particular is local:

“The Eastern Shore Farm and Environment Candidate Forum” presented by the Maryland Farm Bureau and the Chesapeake Bay Foundation. September 24, 2012 7:00 PM to 9:00 PM at Salisbury University’s Great Hall at Holloway Hall. PAC-14 will be recording the forum.

Unfortunately, I’m sure I can’t be there to tell you what really happened because that’s also the night the Republican Club meets. (I wonder if the CBF knew that when the date was selected.) But it will be interesting to see what softballs they lob up there for Democrat Wendy Rosen to answer – from what some non-biased observers have told me, that’s about all she can handle. After all, anyone who brings up the eeeeeevil Koch brothers in conversation may be worth the price of admission in entertainment value, but the scary thing is: some people believe her.

Hopefully more believe this:

This shirt is available for 15 dollars from the Worcester County Republicans.

This comes from Worcester County and I have one of these shirts. And yes, I get good comments from it. You can do the same for a $15 donation to the Worcester Republican Women’s club – contact Joan Gentile: joanierags (at) verizon (dot) net.

More local reaction comes from the Wicomico Society of Patriots, which sent me a sampling of opinions on the movie “2016: Obama’s America” that’s now playing locally:

I…went to today’s 1:05 show, and although (as a TEA Partier) I consider myself ‘informed’, it was well worth the ride from Ocean Pines. The production was excellent, entertaining, factual, and to some was probably shocking. I’m glad to say that it was a big crowd for a matinee. Even if your mind is made up, you should attend if only to show your support for the efforts of the conservatives who made this movie possible.
I was there also… sitting on the point of my chair and asking, “how was that possible?”
Bring your friends, especiallly if they are a kind of democrat, or don’t know what (way) to vote !!!
Thank you Cathy for the update. I had a friend go see it at 3:00 this afternoon, and she said it was very unsettling. She also said the attendance was good, but very few young people. The time of day may have had something to with that. We will definitely be going to see it.
We went with two other couples tonight and all of us were motivated to keep up the fight, and even for those who “pay attention” we all learned some new things.
Saw the 5:30 show…packed…I’ve put out the word too…we are going to have to work, but good will prevail over evil!

I have not seen the movie yet, but probably will before it goes away next weekend. Whatever the attendance is – even if they’re selling out theaters around the country – you can bet your bottom dollar that pressure is being brought to bear to get that movie out of there by next week.

Speaking of upcoming events but looking at a state level, while Maryland and Virginia have had a family feud of sorts through their respective governors, a guy who knows something about family feuds is doing a fundraiser for Maryland businesses.

I’ll let Jim Pettit pick it up from here – he’s good at this sort of thing:

Legendary comedian Louie Anderson will headline Maryland Business Leadership Political Action Committee’s second annual fundraiser at the Baltimore Comedy Factory Wednesday, October 17th, for one show only.

“We don’t think politics and business in Maryland is a laughing matter,” said MBLPAC Chair Cal Ewing, “but we do think it is important for business to come together and support a shared goal – a better business climate in Maryland to create jobs.”

The PAC is an offshoot of the Maryland Business for Responsive Government group which is frequently cited on this site. Eventually they’d like to raise $250,000 for the 2014 election and Anderson’s appearance will help them get there $100 at a time.

Finally, I thought it was worth pointing out that Democrats seem to make up rules as they go along. I know that’s not news to many of you, but Senator E. J. Pipkin and Delegate Michael Smigiel believe the recently-passed gambling bill violates the Maryland Constitution on two fronts:

the Maryland Senate adjourned for more than three days and without the consent of the House, violating Article III, Section 25 of the Maryland Constitution, and, more importantly…
“The (gambling) bill combined revenues, tax rates, and gambling expansion into one piece of legislation. Allowing for the referendum in November violates Article XVI, Section 2,” said Pipkin. Smigiel added, “In the past, we have sought to allow voters take to referendum fiscal matters like tax increases and spending by removing Article XVI, Section 2 from the Constitution. Every time Assembly leadership has rejected these efforts. Now, the General Assembly has passed a bill that in addition to expanding gambling, puts tax matters and appropriations up for a vote.”

Of course, since the Attorney General is a Democrat that complaint, however valid, will get nowhere fast. It’s another reason to vote AGAINST the gambling amendment, Question 7. Let’s make that an unlucky number for a General Assembly majority disinterested in proper process of law.

Somehow I made it through without mentioning Dan Bongino or Andy Harris. Oops, I guess I just did, didn’t I? That’s quite all right, both are worth mentioning.

Oh, one more thing as I toot my own horn. Tomorrow afternoon in the 4:00 hour (around 4:15 is what I’m told) I will be a guest on Blaine Young’s WFMD radio show. We’ll be discussing my book So We May Breathe Free. I asked about the possibility when he was here and we made it happen.