Gov. Robert L. Ehrlich Jr. yesterday overhauled his plan for legalizing slot machines in Maryland by almost doubling the share of the projected $1.5 billion gambling jackpot that would go to racetrack owners and cutting the percentage earmarked for public education.
Ehrlich (R) also slashed by two-thirds the one-time gambling licensing fees that he wants to charge tracks, opening a $230 million hole in his proposed budget for next year.
The governor increased the number of slot machines he would allow at the tracks, from 10,500 to 11,500. If the plan is approved, three of the four designated tracks could offer as many slots as most major casinos in Las Vegas.
Ehrlich predicted that his new plan would pass muster with the General Assembly. "I believe the votes will ultimately be there for slots," he said at a hastily called 9 p.m. news conference at which he announced his plan. "This is the best arrangement to benefit public education in the country."
The governor and his aides had said they could not move forward without the support of track owners, who vowed not to invest in slot machines unless the proposition was economically attractive to them.
Critics pounced on the changes as word of the details spread late last night, calling them a sop to racetrack and gambling interests, which donated more than $120,000 to Ehrlich's campaign for governor.
"It's going to have a very rough reception in the House," Del. Peter Franchot (D-Montgomery) said of the plan. "It's a huge, resounding victory for the national gambling industry. The governor's tilted the bill so they can build their gambling palaces and the kids don't get what they should get."
Track owners by far are the biggest beneficiaries of Ehrlich's revised bill, increasing their share of the annual gambling take from about 25 percent to about 45 percent. All told, they would receive a combined $640 million a year, according to Ehrlich's figures.
In comparison, the portion for education declined from about 64 percent to about 46 percent, putting public schools on an equal footing with the track owners.
Ehrlich's aides said the tracks deserved more because they need to cover the expenses of running the enormous gambling operations. The bill would require track owners to spend $100 million on renovations and other improvements.
"They have to pay for salaries for perhaps thousands of people and other expenses," said the governor's communications director, Paul E. Schurick.
After frustrating lawmakers with the slow pace of his deliberations, Ehrlich waited until an unusually late hour yesterday to release the plan. His staff summoned top lawmakers to the governor's mansion for briefings starting at 6 p.m.
At the news conference, Ehrlich's staff presented documents that made it appear that the track owners would receive roughly the same amount of slot profits as in the governor's previous plan. After questioning by reporters, however, aides confirmed that the fine print of the proposal actually would give the tracks an extra $325 million a year.
Some lawmakers standing at Ehrlich's side to endorse the plan were taken aback when the discrepancy was pointed out. "Wow. So we got [had]," said Sen. Ulysses Currie (D-Prince George's), chairman of the Senate budget committee.
Despite his surprise at the extra cash for the tracks, Currie said he remains willing to work with Ehrlich. "This is just the beginning," he said. "The governor said he's flexible on this. So I'm sure some of these things will change."
Some lawmakers said Ehrlich had hurt his cause by waiting so long to decide on the details of his bill. The assembly is scheduled to adjourn in one month and faces a March 31 deadline to balance its budget.
"It's getting late. Quite frankly, I think some are getting a little turned off," said Del. Obie Patterson (D-Prince George's), chairman of the Maryland Legislative Black Caucus, a group that Ehrlich is relying on heavily to pass slots. "I don't understand the delay. Maybe they don't want it this year. I don't know."
Ehrlich's revised proposal creates another big headache for the assembly. The cutting of the licensing fees would force lawmakers to find an extra $230 million to balance next year's budget.
The governor gave little indication of how he planned to make up the difference. When pressed, he said he would prefer to cut spending but was open to the possibility of tax increases, as long as they didn't affect the sales or income tax.
"Your next question is going to be, 'Hey, Ehrlich, what about taxes?' " the governor said. "Well, we've had very preliminary talks about finding a common ground on taxes."
Ehrlich introduced his original slots plan on Jan. 30 but withdrew it days later after track owners, horse breeders and local governments complained that their cuts of the expected profits were too slim.
Under the new proposal, three tracks -- Pimlico, in Baltimore; Laurel Park, in Anne Arundel County; and Rosecroft Raceway, in Oxon Hill -- would each get 3,500 slots. A thoroughbred track near Cumberland that has yet to be built would receive 1,000 of the machines.
Local governments would receive 3.8 percent of the revenue from slots, a slight increase from Ehrlich's original plan. The amount dedicated to racing purses dropped from 4.7 percent to 3.6 percent.
"We went from bad to worse," said Gerard E. Evans, a lobbyist for the Maryland Thoroughbred Horsemen's Association. "This issue is no longer about saving the horse racing industry. It's budgetary sleight of hand."
Staff writers Jo Becker and Lori Montgomery contributed to this report.