Maryland's governor and treasurer raised questions yesterday about the legality of proposals by a group of Baltimore businessmen to have the state and city help cover possible operating losses of the Baltimore Orioles.
The proposal that the state and city contribute $250,000 apiece in each of the next five years is one method the group would use to balance the Oriole budget should the members succeed in their $12 million bid for the club.
F. Barton Harvey, a member of the group, said there are two means of pursuing the funds: the city and state can waive their share of the admission tax revenue from the Orioles or make an outright grant.
Admission tax revenue from Oriole games has run about $500,000 annually in the past few years while operating losses have mounted. Last season the club lost $234,141.
If the group's plan wins approval, the city and state would pay only the amount of the loss up to $500,000.
At a meeting of the Board of Public Works yesterday, Gov. Harry R. Hughes said the proposals may be illegal because of a constitutional prohibition against the state's giving money to private organizations.
If the proposals are not illegal, Hughes said, their enactment may set a bad precedent.
Should the proposals be legal, however, they would still face a tough battle for clearance by the state legislature.
"I don't want to give the impression that we're not going to look at this with an open mind," Hughes said. "We're going to take a look at it... On the face of it, it appears to be an unusual request. I'm not sure the state can get involved in protecting against losses... to a private corporation."
At the suggestion of Comptroller Louis Goldstein, the matter will be referred to Attorney General Stephen Sachs for an opinion on the legality of the subsidy.
State Treasurer William S. James, who, with Hughes and Goldstein, make up the public works board, remarked, "I'll venture a guess that it's illegal under the Maryland constitution. You can't pass legislation for private corporations."
Harvey said that the rationale behind the proposals "is that these are revenues (the state and city) want and would lose if the Orioles move away."
Harvey said he talked to Baltimore Mayor William D. Schaefer yesterday about the plan. "The mayor said he's going to find a way to do it. He's very enthusiastic," Harvey said.
The American League is expected to ask questions about the group's ability to raise operating funds after scratching together the $12 million to buy the club.