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Friday, October 31, 2008

Maryland Question 2: Slots for Education? No!

Maryland Governor O'Malley has gotten the support of the Maryland Chamber of Commerce to support question 2 in favor of Maryland-based slot machines, the net profits which are supposed to be targeted for education funding. The sales pitch is: Maryland taxpayers are visiting neighboring states with slot machines and essentially funding those state coffers. We need to in-source that revenue for Maryland purposes--or else face a tax increase.

There is the typical liberal false choice:  We accept new spending and program increases itself as given; any cuts are portrayed as cutting into essential services (e.g., policemen on the street, teachers in the classroom, etc.) vs., say, deferring new services, streamlining government, business reprocessing, pay and hiring freezes, layoffs, early retirements, etc., any of the typical types of things that might happen equivalently in the private sector. So, in order to meet the given new state expenditure target, we need to get additional revenues. We can get there by some combination of tax increases or look for an alternative--like slots. Furthermore, we can dress it up by creating a lockbox for public education. (I guess Mom, apple pie and Chevrolet were taken.) Money (state revenue) is fungible. Nobody pretends that public education will be cut if slots don't carry. It's just a way of sugar-coating slots to make the method of revenue raising more socially acceptable.

In 2006 the state of Maryland voted out a popular Republican governor, Bob Ehrlich, with over a 50% approval rating, in favor of wunderkind Baltimore Mayor Martin O'Malley. As usual, Democrats with no checks and balances overreached, and O'Malley had had to call a special session where taxes were raised by $1.4B, and O'Malley's ratings went into the 30's (now in the 40's), even below President Bush's for a while. What's particularly intriguing is the fact that O'Malley opposed slots--before he became governor.

I do not like the idea of a sin tax being used to fund a general priority, like education. (I'm sure that I would not be popular in Nevada for saying this.) It's the same issue I have with sin taxes in general, e.g., cigarettes, alcohol, etc. The tax revenue generated by slots (gambling, an addictive behavior) is borne by a disproportionate number of lower/middle-income people, and tax revenue in this regard is maximized by encouraging addictive behavior. And there is no doubt that widespread deployment of slots through Maryland will exasperate addictive behavior by making it more convenient.

O'Malley has suggested that the GOP and Bob Ehrlich, whom opposes the slots initiative, are being hypocritical given the fact that Ehrlich was known for proposing a more market-based implementation of slots. Other anti-slots arguments include over-optimistic revenue projections and misleading language.

Maryland's Democratic governor and legislature should not resort to gimmicks in order to deflect responsibility for their irresponsible tax-and-spending behavior. I will vote against question 2.