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As Long as We Remember...

April 10, 2007

Robbing Peter to Pay Paul

Farrell Keough

The state can quit anytime it wants. It just never seems to want to quit. So far this year Maryland will be tapping into the "rainy day" fund and the only option for the future is raising taxes.

It seems that addiction is not the purview of individuals only, but extends to government entities as well. Spend, spend, spend seems to be the mantra. Increase the gas tax, increase the state income tax, and increase taxes wherever they can be found.

But, there may be a way out! Allow slots and all will be solved! We'll have tons of money coming into the coffers from all sorts of avenues: out-of-state money, addicted gamblers, people bussed in, (maybe even retirees), weekend gamblers, the list may never stop.

There has already been tremendous progress with taxing gasoline, cigarettes, even an attempt to charge people in the throes of divorce, (this last one did not fair so well).

Now, this is not just a state issue. According to a Study of Video Lottery Terminals by the House Committee on Ways and Means published in January, 2004: "The State has little oversight over local gaming activities, with activities generally overseen by local sheriffs or legislative bodies. Several counties have gaming regulatory boards or committees."

Many of our government entities have developed the capacity to tax virtually anything - mind you, this is not addictive behavior, but rather determining new "needs" - especially those with a legislators name attached.

Fortunately, all of these new revenue sources have been thoroughly vetted to ensure they do provide all the cash the state wants to spend. "It is unlikely, however, that VLTs (Video Lottery Terminals) will substitute for other measures that address the more basic problems of actual revenues not matching planned or desired expenditures in the state budget. Thus, regardless of what the General Assembly decides regarding VLTs in the legislative session, it must still address the long term fiscal stability of state government," that 2004 Ways and Means Committee report said.

Well, almost thoroughly vetted. But again, this is not addictive behavior - to determine a get-rich-quick scheme without having a grasp of the many possible outcomes.

The report continued: "In addition, revenues generated from VLTs may be less than that generated on spending currently subject to the sales tax or from the State lottery." Well, less may be a factor, but it looks like such a good solution.

"Dr. Grinols (a researcher at the University of Illinois, Urbana-Champaign, who has focused his work on the economics of gambling) indicated that introducing casinos would create additional annual special costs of $12.7 million and annual benefits of $4.2 million for a county of 100,000 people. Dr. Grinols explained that gaming merely transfers dollars from one pocket to another without creating a tangible product."

One pocket to another seems to be the direction we are pushing our government to turn. One person makes more income than another; they need to lose that extra income to make a "level playing field." Of course, no one is entirely sure what "level playing field" actually is; but as long as one group determines another group has too much, it is a great, pithy statement to justify most any action.

There are the other positions, however: "Dr. Wellford (from the University of Maryland College Park and the chair of the Committee on the Social and Economic Impact of Pathological Gaming for the National Academy of Sciences) said that gaming is pervasive in the United States and that the only questions still facing states are how much gaming, what types of gaming, and who get the revenues.

"Performing cost-benefit analyses of gaming is difficult, with very little still known about compulsive gaming, and most analyses are weak scientifically and should not be given much weight. He indicated that scientifically acceptable studies all find a net financial benefit from gambling."

You see, some "scientific studies conclude it will be a boon for our economy and all those new "needs" we seem to imagine.

Well, maybe the vetting isn't quite thorough or complete.

But, an interesting point is the addictive nature. It seems that addictive gamblers cannot seem to stop - they lose their savings, their homes, and often their families. Fortunately, the state has no such addiction to spending. They can control the myriad of programs they desire to implement. That is evidence by the current year's session.

As I've already noted in another article, things such as giving our money to "illegal" immigrants has become priority and necessity in our current view of taxation and the need to give more and more of our income to others.

Our government can stop whenever it wants, but it just does not seem to want to quit. We have authorized legislators to represent us and hence we give them free rein to spend on these necessities. Like a gambler, they see some shining prize awaiting them if they can just come up with the means to obtain the income. Right or wrong, just or unjust, it seems we are on a never ending spiral of losing more and more of our income.

In a few days all the chickens will come home to roost. We will see the impact of our representative government in our pocketbooks and we will enjoy the fruits of our voting. Of course, I am speaking to that wonderful day of the year we all work four or more months to afford and gladly give that which we have acquired to the state and federal government - "April 17th" (a little oddity for this year).

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