By Barry Rascovar
Feb. 21, 2018 — Here’s an example why the public doesn’t trust politicians: Right now, Gov. Larry Hogan and Democratic legislators in Annapolis are rushing to pull the wool over voters’ eyes in a scam that would leave taxpayers with billions of dollars worth of IOUs.
Cynics should beware of Hogan’s manipulative plan to divert all slot machine taxes into new K-12 public education programs. They also should take great offense at the Democrats’ parallel plan to do the same thing.
It’s an election-year ruse that would hurt taxpayers or other state programs in the years ahead.
And it is a prelude to another scam lurking in the background that could add three times as much additional education spending without a way to pay for it.
Everyone favors more money for K-12 education, right?
That’s why Hogan and Democratic legislators, in an election year, are now cheerleaders for the “slots for tots” movement in which every tax dollar the state receives from slots revenue would go into a so-called “lockbox” for new education initiatives.
Today, slots dollars support Maryland’s basic education aid formula. And there’s the rub. Hogan and legislative Democrats want to take that pot of money away and put it in another account just for new education programs.
Sounds great, except for one missing ingredient: How is the state going to replace the roughly $500 million in basic education support from slots that they want to strip out of the existing K-12 account?
Good question, but no politician in Annapolis is willing to provide a good answer.
Future Black Hole in Budget
So the next governor and the next legislature could be left with a huge revenue deficit — $500 million — in Maryland’s basic education account.
And if the legislature next year supports the expansive recommendations for new education spending coming from the Kirwan Commission, that revenue black hole could grow to $2 billion.
Hogan, of course, would love to be in a position where his slots lockbox plan “forces” him to slash existing programs by billions of dollars. He’s been whining about being unable to do just that since entering the governor’s office.
But he’s dead set against any new taxes, even for education.
Meanwhile, Democratic lawmakers badly want to pump another $2 billion into K-12 programs, especially in underperforming, poor school districts, as proposed by the Kirwan Commission.
That slot machine money sure looks enticing!
It’s a mirage.
Where Slots Dollars Go
Slots money already pays a big chunk of Maryland’s basic education aid package. How can you take that education aid away without finding replacement dollars?
You can’t. Yet each side is trying to persuade voters the impossible is possible.
Hogan and the Democrats are falling into the same trap as did an earlier governor and legislature. When the Thornton Commission education package was approved in 2002, lawmakers and Gov. Parris Glendening failed to create a funding source. Leaders at the time bragged that robust state revenue growth would support this extra $1.1 billion in new K-12 state spending.
Paying for the Thornton reforms out of current revenue was only possible by stripping money from other programs, like land-use preservation and the transportation trust fund.
When the Great Recession hit in 2008, Maryland’s fiscal situation plunged into crisis, thanks in large measure to the extra revenue burden placed on state government by the Thornton reforms.
That’s when a reluctant Gov. Martin O’Malley became a convert to casinos in Maryland, dedicating the state’s slots tax to basic education, i.e., the Thornton formula.
Without that step by O’Malley and Democratic legislators, the state would have been forced to boost taxes even more to pay the growing school-aid bill.
Now, all of a sudden Hogan and legislators are condemning this common-sense move by O’Malley. They see something wrong with using slots revenue to prop up Maryland’s basic aid formula for public schools. They argue this money was supposed to go into new, expanded school programs.
Talk about re-writing history!
From the start, it was crystal clear O’Malley needed the slots revenue to balance his budget and pay for the growing expenses of the Thornton education-aid formula.
It was also clear from the start slots tax money would go into the basic education-aid pot. Those slots dollars kept Maryland’s foundational education program afloat during the worst economic times since the Great Depression.
One way or another, slots dollars have been supporting education aid flowing to county and city schools in Maryland. It helped pay for the increasingly expensive Thornton aid program.
But it did not add new school dollars on top of the existing education formula.
Democrats and Hogan now call that a sinister trick on taxpayers.
They both say they are trying to right that wrong in the current General Assembly session.
But where’s the revenue to pull that off?
How do Hogan and lawmakers strip $500 million from the basic education-aid formula, give that money to the Kirwan Commission’s new, improved school programs and yet not replace the half-billion-dollar hole they’ve left behind?
Here’s another question: When the full recommendations of the Kirwan Commission are implemented, at an additional cost of roughly $1.5 billion per year, how are Hogan and legislative Democrats going to pay for all those enhancements?
So far, the Republican governor and Democratic legislative leaders have said not a word about paying for that new $2 billion a year in additional school spending.
Is Hogan really serious about slashing existing state programs by giant amounts after the November election so he can avoid raising taxes to balance the state’s education books?
Are Democratic legislators going to campaign this year as Education Champions while setting up taxpayers in future years for gigantic tax increases?
It’s time for some truth-telling from each side.
Don’t count on it.
The slots lockbox propaganda machine is in full swing. Fessing up to voters in an election year as to what’s really going on is the last thing on their minds.