As Maryland Considers Proposals for Final Casino License, Taxpayers Hope to Win Big

Taxpayers in Maryland have been getting the shaft lately as the Taxpayers Protection Alliance (TPA) has documented the outrageous “Rain Tax” discriminately hitting only certain counties and taxpayers in the state; and the recent revelation that Baltimore taxpayers could be on the hook for more than $300,000 in property taxes owed on a building owned by Orioles majority owner Peter Angelos, due to an accounting error! Let’s not forget the Baltimore Raven receiving $130,000 of state tax money to promote Obamacare.  So, it’s safe to say that it isn’t great to be a Maryland taxpayer this year.  A recent study confirmed that the Free State isn’t so free considering that Maryland has one of the worst business climates due to harmful tax policy. Now, a new story out of Maryland harkens back to an issue TPA was involved in last year when the state moved to build a Casino in National Harbor and give tax-breaks to an out-of-state casino operator.

In a story last week, The Washington Post reported that a gaming organization plans to make Maryland officials an offer “they can’t refuse”:

The gambling operator — one of three companies vying for the state’s sixth and final casino license — says it plans to distribute “100 percent of its profits back to the Prince George’s County community” if it wins the bid.

The company offered its ­profit-sharing proposal Monday, shortly before its formal presentation to the Maryland Video Lottery Facility Location Committee. Penn wants to build a $700­­ million Hollywood Casino at Rosecroft Raceway, with at least 3,000 slot machines, 100 live-action table games and a 40-table poker room.

The profits, estimated to equal over $300 million over the first 15 years of the Rosecroft casino’s operations, would be assigned to funding the build of the new Prince George’s Hospital system’s community healthcare network and to the creation of a supplemental pension program for Prince George’s teachers.

This is huge for not only Prince George’s taxpayers but also Maryland taxpayers.  The county and state subsidize the current Prince George’s Hospital to the tune of $30 million annually to cover losses incurred by the hospital operators.  The state and county kicked in $200 million each for the construction of the new hospital – an investment that all taxpayers should hope to be protected and applaud by private dollars such as the Rosecroft casino proposal is offering (to the tune of $100 million over 10 years).  Then there’s the teachers of Prince George’s County.  The Prince George’s education system is heavily subsidized by state taxpayers.  Recruiting new and keeping teachers in the county only adds to the ability for Prince George’s to grow economically and hopefully grow out of its subsidy-dependent stupor.  Using private dollars (more than $200 million over the first 15 years of the casino’s operation) is a great option.

Oh, and there’s another taxpayer consideration Maryland taxpayers should be aware of: the MGM site at National Harbor is on TIF land.  That means that the property taxes for that site will not be going to recipient agencies (such as education) and instead will go to paying off the hundreds of millions of bonds extended by the county to the developer of National Harbor.  That means millions less going to the county on an annual basis if MGM gets the bid instead of either of the other two developers.

Rosecroft’s offer is amazing for Maryland taxpayers considering that last year, when Maryland was readying their move to expand the gaming business in the state, Gov. O’Malley was prepared to give a tax break to MGM Grand.  In response to that proposal, TPA mounted an aggressive campaign against the legislation including ads on TV, radio, and a survey conducted to see exactly where the taxpayers stood on this issue. The TV ad can be seen here.  Survey results (July 2012) during TPA’s campaign couldn’t have been clearer, revealing the following:

• “It is wrong to lower taxes on casinos while taxes on Maryland families are going up,” was the most common response to the question on how a respondent felt about the National Harbor proposal.

• Less than one-quarter of respondents expressed outright support for a National Harbor casino.

• Only five percent of respondents thought giving tax breaks to casinos constitutes a “fair” tax policy.

TPA still believes this was a yet another example of crony capitalism run wild and taxpayers continue to hold Governor Martin O’Malley responsible for his hypocrisy on this issue.

With education and healthcare at the top of the county executive’s priority and as the state nears its decision on which casino is to be located at National Harbor, it is important for state officials to consider what is best for Maryland taxpayers, a special tax cut for one company or offers that put millions of dollars into the community.