Maryland’s 67% slots tax rate “problematic”

Hollywood Casino Perryville is one year old — well, one year and four days old — and those 12 months of slot machine gambling in Maryland left me with too much material to shoe-horn into Friday’s story on how the Cecil County casino is growing up.

Here are a few more tidbits:

Perryville general manager Bill Hayles said he would “love to” have a conversation with lawmakers about lowering Maryland’s 67 percent tax on slot machine revenue.

“A 67 percent tax rate obviously minimizes the reinvestment you can put back into your property, when you’re only taking 30 cents out of the dollar and then you have to pay the light bill and wages,” he said. “It’s not like Atlantic City at an 8 percent tax rate where they can give back a lot more into their properties and their customers. So, we’re kind of at a disadvantage at that tax rate.”

Atlantic City and Nevada are indeed in the single digits with their tax rates — Nevada casinos pay just 6.75 percent on slots revenue — and because of that, those areas get the big, glitzy casinos with all the extra amenities. Maryland, however, is not alone on the high end of the tax spectrum.

Here are the tax rates in other gambling states nearby (data from the American Gaming Association):

Delaware: 57.79 percent

Pennsylvania: 55 percent

West Virginia: 54.14 percent

New York: 66.53 percent

“I think there’s a recognition that the mid-Atlantic region is a very high-tax region,” said James Karmel, a gaming analyst and associate professor of history at Harford Community College. “But I think Maryland’s 67 percent is particularly problematic for growing a successful casino industry here in the state.”

The tax rates on table games are much lower, and that’s a debate you’ll likely see in the 2012 session as lawmakers press to get a referendum on the November ballot.

Those table games change the casino clientele. Right now, according to Perryville’s marketing director Marc DeLeo, the crowd skews a little older, and a little more female. Table games bring in younger gamblers and more men.

Hayles and DeLeo also said they scout other casinos in the area to see what they’re offering and how they’re luring in gamblers. Both veterans of the Atlantic City market, where such visits were once taboo, they said casino executives have softened to the practice.

“We competitive shop, sure. It’s part of the business,” Hayles said. “And I know that we get shopped as well by the Delaware people. We’re happy to have them here.

Western Maryland delegate gets $427K from state

Del. Wendell R. Beitzel, a Republican representing Garrett and Allegany counties, was granted a $427,000 conservation easement Wednesday by the Board of Public Works.

The easement, part of the Rural Legacy Program, will keep Beitzel’s farm in Garrett County from being developed, a danger that Comptroller Peter Franchot wasn’t sure was real or imagined.

Franchot voted in favor of the measure, but said it “stuck out like a sore thumb.”

“We’re paying $450,000 for a property in Western Maryland to protect it from development,” the comptroller said during Wednesday’s BPW meeting. “What development is going out there that I’m unaware of?”

The Beitzels will get $4,935.85 cents per acre for the 86.51-acre farm. Administrative work, including appraisals and a survey of the property, add another $27,766 and bring the total cost of the easement to $254,000.

According to the program description provided to the board, the easement will “protect valuable agricultural and forest lands, as well as provide a permanent forest buffer on 2,990 feet of Bear Creek and tributaries.”

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More on the Maryland transportation funding puzzle

Sen. Ed Kasemeyer, the chairman of the powerful Budget and Taxation Committee, had a frank assessment Wednesday of the General Assembly’s record on the gasoline tax.

“We just didn’t do our job,” he said.

The excise tax on gasoline has been 23.5 cents per gallon since 1992, and before that, gas tax hikes were a regular occurrence in Annapolis as lawmakers tried to keep the revenue stream growing with inflation. (The tax isn’t indexed.)

Kasemeyer expanded on his statement after the hearing Wednesday on transportation revenue options. He said the legislature has avoided many “unpleasant” tax and fee increases over the years, a pattern that backs lawmakers into a corner and forces big increases on the public. The alternative — steady, regular increases — would be better, he said.

“These kinds of fees and taxes and tolling, as long as you know what’s going to happen, when it’s going to happen, there’s an acceptance,” Kasemeyer said.

Some other tidbits I couldn’t shoehorn into my story on the hearing
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O’Malley invited to Obama’s job speech

Tune into President Obama’s jobs speech Thursday and you may see a familiar face in the crowd.

Gov. Martin O’Malley will attend the president’s economic speech before a joint session of Congress, the governor’s office revealed Wednesday.

A spokeswoman for O’Malley said the invitation was extended by the White House earlier this week.

“It was definitely last-minute,” said Takirra Winfield, the spokeswoman.

“I think the White House does recognize the governor’s stance on jobs and job creation,” she said. “He’s right there with the Obama administration in finding innovative ways to invest in and create jobs.”

Indeed, not only is O’Malley an easy choice for a short-notice invite — the Maryland State House is a 32 mile drive from the White House – but the two men haven’t been shy about promoting what they believe to be the government’s ability to spur job creation.

Just last week, O’Malley appointed nine members to a board that will oversee a venture capital program filled with $75 million in state funds.

“For a modern economy to create jobs we need to make modern investments,” O’Malley said then.

Then there was Obama’s $787 billion stimulus program and the plan he’ll unveil Thursday is expected to cost at least $300 billion. It will include tax cuts and infrastructure spending, according to The Washington Post.

O’Malley will “be there to listen and see how this affects Maryland,” Winfield said.

No word yet on whether or not O’Malley will get a presidential shout-out during the speech. You’ll just have to tune in and find out, unless you’d rather watch football. (If nothing else, the jobs speech will effectively push football previews onto G4 and SyFy, channels better known for coverage of video games and this. That’s some kind of accomplishment.)