Just Make It Up
This appears to be the motto of the O’Malley financial brain trust. We’ve seen them promise that the governor’s plan to expand medicaid coverage in Maryland would only cost $500 million with $250 million of that being provided by the federal government (apparently the federal government works nights at Taco Bell to earn this money otherwise some member of Maryland’s press would have wondered how the feds were going to come up with their contribution) but now the General Assembly’s budget watch dog says the cost will top $700 million. We’ve seen that they can’t even be bothered to add up their own numbers correctly.
The same strategy is underway with slots.
Back when the hapless Tom Perez locked himself in a Motel 6 for a weekend with a bottle of cheap scotch and a carton of unfiltered Camels to write his analysis of slots revenues for Maryland the governor and his minions were saying this about slots revenues:
Under O’Malley’s plan, when fully phased in, the state-owned machines would generate $425 million a year for education and other state programs, O’Malley said. An additional $125 million a year in slots proceeds would go toward construction of education facilities, and $100 million a year would be used to supplement horse racing purses — a practice in place in neighboring states.
I said then that this estimate is too high by an order of magnitude given the revenues of neighboring states and now that we know that the governor’s slots plan will result in a decidedly down-market environment with few comps and giveaways, I am even more convinced this estimate is wildly optimistic.
But what are the governor’s staffers saying now?
O’Malley’s slots bill, aides say, could eventually generate more than $700 million a year for the state and about $400 million for operators. An additional $100 million a year would be set aside to subsidize Maryland’s horse-racing industry.
In a couple of months the income estimates have increased by $150 million despite what we now know about the unattractive nature on the current slots proposal both to gamers and to game operators.
There is one reason that the estimates have increased. Those numbers are needed to balance the Potemkin budget O’Malley intends to ramrod through the General Assembly. The won’t, and really can’t, pan out and next year we will be set for another round of tax increases.