"Short-Term Challenges Require Long-Term Vision
By: Peter Franchot, J.D.
Peter Franchot, J.D., is the Maryland state comptroller.
Earlier this week, The Conference Board reported that consumer confidence has reached a 16-year low as a result of spiraling oil prices, concerns over job security and the specter of inflation. This latest news comes amid continued fallout from the collapse of the sub-prime lending industry, which has lifted U.S. home foreclosures to an all-time high while undermining the stability of the stock market and virtually every sector of our nation's economy. This latest confirmation of consumer anxiety comes as no surprise to families that are struggling to pay the bills and keep a roof over their heads, while the price of everything from a gallon of gas to a gallon of milk is on the rise.
In March, the Maryland Board of Revenue Estimates, which I chair, reduced our state's revenue projections by $330 million over the next 16 months. This confirmed that while Maryland's economy remains strong—due to our proximity to the federal government and the presence of a thriving high-tech economy—we are not immune to national economic trends. It also served as a sobering reminder that the state of Maryland continues to face a structural budget deficit, even after the enactment of a record tax increase last November.
It is in this climate of fiscal and economic uncertainty that Marylanders
will go to the ballot box this November and vote whether or not to amend our
state's constitution by legalizing 15,000
slot machines at five locations throughout Maryland. As comptroller and
Maryland's chief fiscal officer, I am
working in active opposition to this constitutional amendment. I can think of
nothing more irresponsible than tying our state's economic future to the national gambling
industry's empty promises of easy money.
Though the economic forecast is likely to get worse before it gets better, these
challenges are temporary. Slots and their negative fiscal impact, however, are
forever.
I believe we can and should do better—both now and over the long term. Even supporters concede that slots would not generate any significant revenue until 2012 at the earliest. In an effort to address our fiscal challenges immediately, I have introduced a Tax Fairness Initiative that will bring in an estimated $200 million as it is phased in over the next four years. Once the new technology and personnel are fully in place, it will generate up to $100 million per year. This is not adding or raising taxes—we are simply working aggressively to enforce the tax laws that are already on the books.
In addition, I have instituted numerous partnerships with the U.S. Internal Revenue Service to help my state collect what it is owed. Last July, we were proud to be the first state in the nation to partner with the IRS in a "federal vendor offset" program. Originally estimated to bring in a little over $10 million for Maryland in the first year, it will in fact help us collect in excess of $25 million in the first year alone. In fact, it was for innovative programs like this that the AGA [Association of Government Accountants] honored Maryland and my office with the 2007 William Snodgrass Award.
In the long term, the solution for fiscal health and stability is an economic development strategy that harnesses our existing strengths—particularly in the life sciences—and helps grow and expand our tax base. Instead of resorting to the empty gimmick of slots, we must get back to the basics of growing our economy the old fashioned way by investing in innovation, building our educated work force and promoting industries that are environmentally sustainable and conducive to small business entrepreneurship.
As other states like North Carolina, Michigan and California significantly increase their investments in the life sciences, this is not the time to be distracted by the issue of expanding gambling. In addition to their enormous and well-documented social costs, gambling is a notoriously undependable source of revenue. While 15,000 slot machines may look good today, what happens when neighboring states add machines, gaming tables or casinos into the mix? I'm afraid that it would be the beginning of a corrosive cycle of budgetary uncertainty and further tax increases.
The collapse of the sub-prime lending industry has taught us all that there is no such thing as an easy fix, that there are no shortcuts to prosperity and that if something sounds too good to be true, it usually is. The immediate fiscal challenges we face today are an opportunity to reinforce our immediate commitment to tax fairness and our long-term investment in the knowledge-based economy. It is an opportunity that shouldn’t be squandered by a shortsighted and destructive obsession with slot machines. I welcome your thoughts and comments, as this is a national issue.'http://aga.typepad.com/aga
http://www.marylandersunited
I'm in the amen corner on this one. Slots are not a painless way to raise revenue. They are not a fun version of a sin tax. They are not even a form of 'user's fees,' which in actuality are never restricted merely to the user anyway.
Anywhere you bring in slots, local crime goes up. Anywhere you bring in slots, business at the local pawn shops goes up. Anywhere you bring in heavy gambling, traffic fatalities on roads in the immediate neighborhood increase. Bigtime gambling directly causes an increase in household debt, mortgage delinquencies and other balance delinquencies. It contributes to a concomitant increase in domestic violence, divorce, and arrears in child support.
It is also, as a man who is himself a conservative and a professional gambler once pointed out to me, a ridiculous way to finance education. As he put it, the conservative belief is that If you want schools, you should be willing to pay for them.
Stumble It!