Leggett's Strategy On Slots: Hushed
Local Opponents Urged to Await Md.'s Budget Fix

By Miranda S. Spivack
Washington Post Staff Writer
Sunday, August 26, 2007

Montgomery County Executive Isiah Leggett has been quietly urging local lawmakers to take a low profile in the statewide debate over slot machine gambling even though polls have shown repeatedly that county residents are the state's most ardent opponents.

Leggett's decision to lower the decibel level on slots marks a new approach for Montgomery Democrats in a debate that for years has divided state political leaders. The payback, Leggett hopes, would be a state budget package that plugs an estimated $1.5 billion shortfall without making Montgomery residents shoulder what county leaders say would be a disproportionate share of the costs.

"Personally, I oppose slots," Leggett (D) said recently when asked to confirm that he had shifted the county's strategy. "But in the context of where we are today, everything is on the table."

Leggett made his pitch on slots to Montgomery legislators and County Council members at a July 30 meeting in his Rockville office, which was not on his public schedule. Leggett confirmed in an interview that he asked the county's elected officials to keep quiet about slots and to limit any comments on an income-tax increase. He said he believes such a tax increase could disproportionately hurt Montgomery, where the locally imposed "piggyback" income tax is among the state's highest.

Some people at the meeting objected, saying they considered slots to be an unfair tax on the poor that would do little to fix systemic budget problems plaguing Maryland, according to several of those who attended.

"Everybody has to acknowledge that slots have a regressive economic effect," said state Sen. Jamie B. Raskin (D-Montgomery), who was at the meeting. "It is like a tax on large numbers of less-affluent people. At least, the ones who aren't lucky."

Leggett said he understood those concerns but thought that the state's economic situation and its likely impact on the county budget were so severe that it would be a better strategy to hold back slots opposition until the elements of a budget deal were clear.

That strategy is far different from that of his predecessor, Douglas M. Duncan (D), who frequently bashed slots and used the issue to distinguish himself from Gov. Martin O'Malley when they were competing for the Democratic gubernatorial nomination. Duncan dropped out of the race before last September's primary.

A majority of the county legislative delegation has opposed slots consistently. In 2005, when the Maryland House of Delegates last voted on a slots proposal, 20 Montgomery Democrats voted against it and three of the county's Democrats and one Republican voted in favor.

Whether the Leggett approach gets results for Montgomery won't be clear until state leaders craft a tax and spending package to prevent the budget shortfall, which could come as soon as next month.

Leggett's strategy could have benefits for Montgomery, which could mute its opposition to slots with little immediate local impact. Under almost any scenario, Montgomery would not become a site for slots, which are expected, at least initially, to be placed at racetracks. Montgomery has none.

But the strategy also has political risks, said Keith Haller, president of Potomac Inc., a Bethesda-based consulting firm that has polled on slots for the past decade.

"I know Montgomery has consistently been one of the strongest communities against slots, even when you pose the notion that you are going to solve the education funding issue or provide a panacea for the state's fiscal woes," Haller said. "There is a lot of underlying opposition and it is philosophic."

Leggett said his tactics are founded on fears that his county will be hammered by state officials. In a worst-case estimate outlined early in the summer by state budget officials, Montgomery could lose $155 million in state funds under certain scenarios. Already facing an expected shortfall of $270 million in the county's budget for the fiscal year beginning July 1, Leggett is not eager to lose additional state money. The combined budget for the county schools and local government is about $4 billion annually.

High on Leggett's wish list in any state budget deal, he said, are maintaining state payments for teacher pensions, rather than asking the counties to pay; limiting income-tax increases and changes in corporate taxes; and making good on long-promised extra payments to county schools, which this year would have totaled about $23 million had they been paid by the state.

Leggett's efforts to quell vocal opponents of slots could have political benefits for O'Malley, giving him some fodder to neutralize opposition to slots from other politically powerful jurisdictions, including Prince George's, where many elected officials oppose slots.

Former Montgomery state senator P.J. Hogan, who served on the budget and tax committee and who was widely seen as a likely vote for slots, said he thought Leggett's approach would give the county some needed leverage at the bargaining table.

"Slots will be part of the package, absolutely. It's too big not to be," Hogan, a Democrat, said. "People should stop and wait and look at the whole package. No one item is going to solve the problem," he said.

Some county lawmakers are dismayed at Leggett's strategy.

At the July 30 meeting, some in the delegation said they would prefer an income-tax increase, which they argue would affect all Maryland residents equally based on their income, not on their propensity to gamble, several who attended said.

And some lawmakers at the meeting also urged changes in the tax structure of the kind proposed by state Sen. Paul G. Pinsky (D-Prince George's). Pinsky wants to plug some perceived loopholes that he says unfairly target Maryland companies but allow out-of-state firms with branches in Maryland to avoid taxes.

County Council member Marc Elrich (D-At Large), a slots opponent who attended the meeting, said in a recent interview that an income-tax increase's affect on county residents could be limited if the council lowered the piggyback tax.

"We could cut our local rate and mitigate the impact on Montgomery County taxpayers, if the combination of the two is too much," Elrich said.

If slots became inevitable, Elrich said, another possibility would be to give control of slots to the state rather than to track owners and the gaming industry, increasing the state's take.

Two other prominent Montgomery Democrats have weighed in on the slots issue recently.

Last week, Maryland Labor Secretary Tom Perez, a former Montgomery County Council member, said in a report commissioned by O'Malley that slots are a reasonable solution to a host of state financial problems and could staunch the flow of at least $150 million in revenue from Maryland residents going to betting sites in Delaware, Pennsylvania and West Virginia.

The report was roundly criticized by former Montgomery delegate Peter Franchot (D), now the state's comptroller.