The Maryland Public Policy Institute
MPPI IN THE NEWS
The media ads are split on Question 7. A lot of money is being spent by the gaming industry to influence the outcome both for and against the issue. But the big question for Maryland residents to answer is,"Will additional expansion of gaming benefit the state?"
Proponents of the expansion claim building a casino in Prince George's County will create thousands of construction jobs; but non-union contractors need not apply. The number of permanent casino employees is impossible to estimate. The state currently has authorized five locations and all of them are not yet operational; adding one more will only cut into the total pie. It would be better if the State waited until we see if the existing establishments are solvent before expanding the industry. Maryland's State Comptroller, Peter Franchot's view is that, "it would be grossly premature to break ground on a sixth gambling casino without knowing if the marketplace could even support the ones we already have."
Comptroller Franchot further said the November referendum on gaming will not be "about legalization of slots but will be about the type of government Marylanders want, and the kind of state we wish to leave to our kids." He says "expanded gaming won't generate the revenue state officials promise." The Baltimore Sun is also encouraging voters to vote against the referendum.
The Maryland Public Policy Institute concluded that the gaming industry will be the primary beneficiary if Question 7 is passed. It points out that 72 percent of the additional gross gaming revenue will go to the casino owners while only 24 percent will find its way to the Educational Trust Fund. It also points out that gaming promises made in 2008 have not been realized. State estimates were that five casinos would generate $1.4 billion by 2013. Nowhere near that amount has been raised. Our neighboring states of Pennsylvania, West Virginia and Delaware all have well established gaming venues with low tax rates. Maryland's lack of comparative advantage to casinos in those states will only increase the pressure on legislators to lower tax rates on state casinos by even larger amounts, further increasing the share of revenue to operators.
There is no guarantee that more funds will go to education. Directing funds to the Educational Trust Fund does not mean more money ends up in the classroom. What it does mean is that less general fund money is sent to the schools, freeing those funds up for other purposes. Remember that the Governor can raid the Educational Trust Fund to balance the state budget The skepticism voiced by teachers in recent TV Ads is well founded; the state is under no obligation under this law to increase overall funding to schools. Possibly no new money will find it ways to schools. The state moved $350 million out ofthe Educational Trust Fund to the General Fund in Fiscal Year 2011. So the big Shell Game will just continue.
Vote No on Question 7.
Mr. Kelley lives in Wittman and is a member ofthe Board of Directors ofthe Republican Council.