Maryland residents passed a hotly contested referendum proposing slot machines funding education as a solution to the state's budgetary crisis, hours after which Baltimore City approved a $4.1-million purchase of land south of the city's downtown that will be used to build a casino.
Question 2, which passed 59 percent for and 41 percent against in both Baltimore City and overall in Maryland, was cause for fierce debate between groups organized around the issue. In recent weeks the controversy reached the Hopkins campus.
The success of "Question 2" will result in the amendment of the Maryland State Constitution, adding Article XIX, which will allow the state to grant licenses for up to 15,000 slot machines at five locations across the state. These locations will include Baltimore City, Laurel, Rocky Gap, Cecil County and the Eastern Shore.
On Oct. 8, Comptroller Peter Franchot wrote a public letter to University President William Brody, denouncing Hopkins's Senior Associate for Finance and Administration Frederick Puddester.
Franchot, who once co-sponsored two bills in the Maryland State legislature to introduce a gaming industry, opposed Question 2 based on his claim that the proposal would increase crime and addiction across the state.
Franchot served as a member of the steering committee of Marylanders United to Stop Slots. In his letter, Franchot denounced Puddester for his involvement as chairman of the pro-slots group and warned Brody that allowing a senior administration official to be involved in such a campaign risked sullying the Hopkins name.
"I fear that Dean Puddester's actions will reflect negatively on the reputation of Hopkins University and its staff, as the Dean is now a full-time attack dog for a political campaign funded by the gambling industry while still in your employ," Franchot wrote.
Puddester was asked by O'Malley to chair the pro-slots campaign For Maryland For Our Future, which Franchot accused of negative campaigning and an attempt "to buy the upcoming election."
Puddester is also the chair of the Maryland Stadium Authority, which also stands to benefit from the new legislation.
"Mr. Puddester was involved in the campaign on his own time, and like any citizen he is free to do that," Dennis O'Shea, executive director of communication and public affairs, said.
"I am glad and proud of President Brody for giving Fred [Puddester] the freedom to pursue his own beliefs in his spare time," City Councilman Bill Henry said.
"It was a perfectly reasonable thing for the comptroller to ask of President Brody and it was perfectly reasonable for President Brody to refuse it."
Puddester and Franchot were both unavailable for comment.
In a statement released after the victory of the slots amendment, Franchot emphasized his perception of the campaign for Question 2 as an unequal battle heavily influenced by interest groups.
"We were outspent 10 to one; had the state Democratic establishment against us; the lobbyists and the deep-pockets of the national gambling industry," he said.
Furthermore, Franchot, who runs the state's finances, continues to insist, "This gambling gimmick will not solve our budget problems."
According to For Maryland For Our Future, Maryland is laboring under an enormous budgetary shortfall that could amount to $700 million annually.
Shaun Adamec, the deputy press secretary for Martin O'Malley, confirmed the connection between Maryland's budget crunch and Question 2.
In 2007, the Maryland General Assembly passed legislation providing a statutory framework for spending of funds, contingent upon the voter approval of Question 2 granted on Election Day.
According to the framework, 48.5 percent of the slot machine revenue will be spent on education; another 33 percent will go to the slot machine operators, with 7 percent earmarked for horse racing purses, 1.5 percent to Small, Minority and Women-Owned Businesses Account.
Question 2 was worded as "Authorizing slot machines to fund education."
All education funding will go directly into the Education Trust Fund, which will disperse money to a variety of academic institutions including community colleges, K through 12, and direct funding programs, according to Adamec.
"The referendum was a fairly sizeable part of closing the structural deficit that this administration inherited from our predecessors," Adamec said, referring both to the policies of O'Malley's predecessor, Robert Ehrlich, and to the in-built problem of Maryland state finances.
A structural deficit occurs when the costs a government must bear are larger than the state income, with no foreseeable pattern changes.
Budget shortfalls have become so severe in Maryland that many state activists worry about possible cuts in state services, such as in education, according to the For Maryland For Our Future Web site.
Maryland is one among many state governments now facing increased strain on its resources due to the national financial crisis and increasingly limited liquidity.
"The state has a legal mandate, not to mention an ethical one, to balance the budget," Adamec said.
Henry confirmed the severity of the budget crisis, in both Baltimore City and across the state. Henry said he wished the City could find more money to invest in affordable housing.
Henry estimated that Baltimore City needed "$2 to 3 billion worth of investment" in this sector, a wish that will likely remain a dream, short of federal funding.
State officials expect that the 15,000 slot machines will bring in a substantial amount of new revenue for the state - perhaps as much as $700 million by 2012.
Some members of the Hopkins community shared Franchot's concerns about the problems of Question 2.
Junior Ben Mays, who voted against Question 2, based on his assessment of the proposal as "not a moral, just or equitable way to solve the lack of funding for public schools."
"The thing is that the people who use slot machines are not the wealthiest members of society, and it's a distribution of wealth from the bottom to the public sector," he said. "If we want to fund public schools we should do so in a more equitable fashion, one that does not extract money from people with gambling addictions."
Henry, however, disagreed with the view of the anti-slots coalitions and voters like Mays. In the councilman's opinion, "the public harm" of slots "is outweighed by the right of the individual to gamble - especially because we already have a state lottery," he explained, referring to gambling machines that have long been available in local bars.
Furthermore, as a representative to Baltimore City government, he judged the legislation as well worth the introduction of more gambling machines "if on the local level we can get another $40 to $50 million from slots."
Adamec said that O'Malley's office remains optimistic about the changes Question 2 may help affect. "The election delivered the result that the governor had hoped for," Adamec said. "There's a lot of work to do now. It's the first step in a long process that will ultimately bring new funding for education in Maryland."
