Last fall, Robert L. Ehrlich Jr. campaigned on a platform of "slots for tots," a promise to help pay for an ambitious $1.3 billion plan to improve public schools by legalizing slot machines in Maryland.
But when the new governor introduces his slots bill next week, aides confirmed, he will propose that the projected windfall from gambling go straight into the state's general fund -- with no guarantee that the money be set aside for education.
Ehrlich's plan for the revenue is drawing heavy fire from leading lawmakers who otherwise back legalizing slot machines. They warn that public support for gambling could wither if voters think the proceeds are being used to pay for needs besides education, a perception already fueled by reports of interest groups jockeying for a share of the slots jackpot.
"He's going to have problems with public support," said Del. Howard P. Rawlings (D-Baltimore), chairman of the House Appropriations Committee and a prominent cheerleader for slots. "We'll have a difference of opinion on that."
Rawlings is drafting a bill that would permit four horse racing tracks to operate a total of 10,000 slot machines -- as long as 50 percent of the net proceeds go to a trust fund for education. Although estimates vary, that could mean as much as $600 million in annual revenue for schools and libraries.
Senate President Thomas V. Mike Miller Jr. (D-Prince George's), one of Ehrlich's biggest allies in the push for slots, called the governor's proposal "a mistake." He said tax revenue from gambling is volatile and should be reserved for new education programs, instead of being used as a tool to erase next year's projected shortfall of $1.2 billion.
"You don't use gambling revenues to balance the books of state government," Miller said.
Ehrlich and his staff members said there is no need to earmark gambling money for education as long as schools get their fair share in the end. "The commitment was to use the proceeds to fully fund education, and we're doing that," said Paul E. Schurick, Ehrlich's communications director.
But with the state juggling expensive demands, some lawmakers worry that slot machines are being seen as a cure-all for a number of ills and that there won't be enough money to go around.
"I don't think they know what the message is," said Sen. Brian E. Frosh (D-Montgomery), who was co-chairman of a legislative commission on gambling last year. "It's just slots, slots, slots. It's a lousy way to raise revenue, and it's a policy that's destined to fail."
Gambling is expected to dominate this session of the General Assembly. In addition to Ehrlich (R), many top Democrats support legalizing slots, and a Washington Post poll in October found that nearly 60 percent of Marylanders also like the idea. Still, the debate is likely to be heated.
An organized opposition has been slow to form, but yesterday an unusual coalition that included religious groups and bar owners met privately at an Annapolis church to discuss strategy. The featured speaker was House Speaker Michael E. Busch (D-Anne Arundel), an outspoken opponent of slots.
Bar owners and restaurateurs are worried that casinos at racetracks will lure their customers away with discounted drinks and meals. The Methodist Church and other groups are fighting slots on moral grounds.
W. Minor Carter, an Annapolis lobbyist who helped organize the meeting, said the coalition will try to raise money but needs to rely on "people power" to convince lawmakers that legalized gambling is a bad idea.
"It's going to be a very, very tough fight," he said. "The governor is involved, which always raises the stakes and makes the job that much harder."
Ehrlich has claimed broad public support for his gambling plan, calling the gubernatorial campaign "a referendum on slots." Critics have challenged the assertion, noting that Ehrlich polled some of his widest margins in areas that are adamantly opposed to gambling, such as the Eastern Shore.
Since his election, Ehrlich has pitched slots not just as a way to help schools, but as a remedy for Maryland's ailing racetracks, protection against sprawl (by preserving horse farms) and a relatively painless method for closing the budget gap.
If Maryland doesn't allow slots, he added, its residents will gamble their dollars away regardless in neighboring states where the practice is legal.
"The focus needs to be on horse racing and education," Ehrlich said this week. "We're trying to save horse racing first. Second, we're trying to stop the outflow of dollars to West Virginia and Delaware. Third, we're trying to find money for education."
Other groups have been lobbying for a slice of the gambling pie as well. Maryland's Legislative Black Caucus has been holding meetings to discuss ways to steer some of the proceeds to black investors and black businesses. They also want money reserved for "community impact" funds to benefit neighborhoods near the racetracks.
"You know it and I know it: There's going to be a certain amount of profit, regardless of how much goes to education," said Del. Obie Patterson (D-Prince George's), chairman of the black caucus. "We all know that all the money this operation is going to bring is not just for education."
Last year, the General Assembly passed a measure that by 2008 is supposed to pump an extra $1.3 billion annually into public education, even though there was no fixed source of revenue for it.
As a result, many lawmakers sold slots during the fall campaign as a way to turn vice into virtue by taxing gamblers to benefit the schools. Some are now worried that the public will turn against them if they don't require that slot money be used for that purpose.
The state lottery was created more than 30 years ago under similar pretenses, with the promise that it would be used to help public schools and senior citizens. Some residents and lawmakers are still disturbed that the state treats those proceeds as general revenue, said Sen. Paula C. Hollinger (D-Baltimore County), chairman of the Senate committee that oversees education policy. "There's been so much hype about slots money going to fund education," Hollinger said. "The public perception is that it's going to education. It should stay that way."
Business groups have insisted on the same thing. The Maryland Chamber of Commerce voted in October to endorse slots -- as long as the machines are restricted to racetracks and the profits go to schools. "We want the money to be dedicated for public education," said Kathleen Snyder, the chamber's president.
Matthew Crenson, a political science professor at Johns Hopkins University, said Ehrlich probably won't hurt his standing with the public if he uses money from slots to balance the budget instead of tying it to education.
Recent polls, he said, show that voters rate the state's fiscal condition as their most pressing concern. "Everybody's attention is focused on the deficit," he said.
Ehrlich's biggest challenge, he predicted, will be to distance himself from racetrack owners, casino companies and other wealthy interests that stand to earn millions if slots are approved.
"He's got an image problem with slots," Crenson said. "These groups have proven to be so greedy and such insistent lobbyists that they're beginning to make the legislature uncomfortable. It's like inviting a rattlesnake into your tent."