Franchot: Slots will fail

BALTIMORE (Map, News) - Comptroller Peter Franchot, a fierce opponent of slots and the special session, recently sat down with Examiner State House Bureau Chief Len Lazarick. Here is an excerpt from that interview.

You opposed the special session. What is your view of the outcome?

Right now I'm moving into an implementation mode, and enforcing what the governor and the legislature passed. It was a record-setting tax increase, and I continue to have concerns about the impact of the product on the state economy. The national economy is teetering on the edge of recession. In my opinion, the jury is out whether the product is good for the Maryland economy.

Something that the jury is not out on is the fact that they passed slot machines. I consider that to be bad for Maryland's economy and will vigorously oppose the referendum.

Do you think slots can be defeated?

I believe when the facts are brought out that slots are bad for state economies, the public will vote slots down as the wrong direction to be going. Except for Nevada, every other state, the data shows that crime increases and the social costs more than offset any revenue.

This is not a moral issue for you.

This is a fiscal issue. We should be emphasizing the knowledge-based economy. That's the strength of Maryland — a well-educated work force, and we should not be advocating a dead-end industry like casinos and slot machines.

You had suggested that there should have been a blue-ribbon panel on the tax structure. Isn't that something you could have mounted on your own?

I did reach out to the business community to get their reactions to economic trends. My recommendation to the governor and the legislative leadership was that whatever tax package they came up with, make sure that it's inclusive and comprehensive and fair.

Don't take a tax package out of thin air or create it in private and amend it behind closed doors and pass it at 2 in the morning. Then perhaps we would not have adopted something like the $200 million sales tax on computer services. We're going to enforce it, but it's a bad idea.

Why?

Because it taxes the knowledge-based economy, which is our strength, and then to add insult to injury, they go in the direction of slots and casinos as an economic future for the state of Maryland. So we're not only hurting our strength, we're rewarding the worst possible image.

My economic vision for Maryland is the life sciences, health care, information technology, everything that fits our strength.

If you're successful in your effort to defeat slots, some say there's a funding problem with the effort to increase health care accessibility.

I disagree. I think there's ample opportunity and more than enough time to appoint the blue-ribbon commission to develop substitute funding streams for important environmental, health care and other programs that the legislature may wish to move forward on.

I believe slots will be defeated and should be defeated.

You have voted for tax increases in the past.

My aversion to the special session was the process, and the lack of homework and preparation and the emphasis on approving slot machines.

Do you have any evidence that the economy has gotten any worse?

It's a roller coaster. It's up one month, down the next. But clearly the national economy is much closer to recession than it was a month ago. There are lots of warning signs out there about the softening of the economy.

I have communicated my apprehensions that we're heading into a significant slowing of the national economy. That needs to be closely watched from a state level.

I advocated go slow, be cautious, have all the information in front of you. I wasn't included in the process, and neither frankly was the public. So they now have their product and we'll see what the reverberations are.

What do you hope to accomplish with your life-sciences forum next week and why are you involved with that?

I campaigned on a couple of issues, including the life sciences, and specifically said I would hold a summit on the life sciences so that Maryland could inventory its assets in that area, and we could brand ourselves as a state. I mentioned it in my swearing-in talk. We've got a wonderful panel of a group of individuals. I think at the end of the day we'll have some very interesting results about where Maryland is positioned.

I believe when we meet on Dec. 13, we're going to have some major announcements about the significance of the life sciences in the state of Maryland.

You're having a great time as comptroller.

Everybody realizes that I show up at work with a big smile on my face and enjoy greatly being the happy warrior and doing the job that the people elected me to do. In the agency, we've got some tremendous expertise and veteran leadership, and I've spent a lot of time working with them to take the agency to the next level. It's a big priority.

Of course, my second priority is to be an independent voice — somewhat like [Louis] Goldstein and [William Donald] Schaefer, with a different focus. Being able to tell it like it is. Give an independent economic analysis of the direction and progress of the state. It's going to ruffle some feathers.

People say the comptroller is sticking his nose into things he shouldn't.

I remind everyone over there that if I were in agreement with them on slots, they'd be scheduling me to speak. The public elected me to be a check and balance, and they elected me to be an independent voice because that's what I've always been.

Am I a team player? Absolutely. I don't think that there's any doubt that the governor and I are going to work together to implement a new direction in this important area that affects tens of millions of dollars of contracts.

The dilemma is that the political establishment supports slot machines and I don't, and we're going to beat them at the polls in November. But it creates this friction on other issues, and it kind of overshadows where I work closely with legislative leaders.

Would you fully support Gov. O’Malley’s re-election?

Yes, I do. I like Gov. O’Malley.

And you guys seem to agree on a lot of issues, but not on all of them.

Yes, but not on all of them. I'm a Democrat, but I'm not a robot.

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