Fitzsimon File

Governor Mike Easley, presumably getting ready for his inauguration this weekend, has been giving interviews to newspapers about his agenda for the next four years.

And shockingly, the lottery keeps coming up. Not much of a surprise, but too bad, because the governor knows better. He knows that there is no such thing as an education lottery, there is only a lottery that in other states does a poor job of paying for education.

He also must know that in a year when he is talking about possibly overhauling North Carolina’s tax code, the lottery is exactly the wrong way to go. The author of a recent study released by the Tax Foundation concludes that state-run lotteries make tax systems “more regressive, less transparent, and less economically neutral.” Is that what Easley has in mind for the revamped tax system?

It might be. The New Bern Sun Journal reports that Easley believes that lowering the state’s corporate tax rate would be a good idea. He said recently that he hoped to let two tax hikes passed in 2001 expire this year. And if had to choose between the two, the half-cent increase in the state sales tax and a higher income tax rate for the state’s wealthiest taxpayers, he would end the income tax increase.

It is not clear how he plans to balance the budget if those taxes are reduced. Proceeds from a lottery won’t close even a third of the state’s budget shortfall if it started the first day of the fiscal year.

Easley likes to point out that every state that borders North Carolina has a lottery, meaning our money is building schools in South Carolina and Virginia. Lottery proponents claim that North Carolinians are spending as much as $250 million on lotteries in those states. That figure is probably too high, but two points are always neglected when folks make this claim. Only a third of that money would come to North Carolina anyway. That is the state’s share, roughly a third of the money spent.

Secondly, we don’t know that the dollars will stop crossing the state border even if North Carolina had a lottery. People on the border would play the lottery with the biggest jackpot, or the one that did the most effective job advertising. Is that what we want, North Carolina furiously competing with other states to attract players, using more and more aggressive advertising?

Easley must know that too and he must have seen the study done in the late 1990s and cited in the Tax Foundation’s report that found that people of all incomes buy lottery tickets, but people who make less than $10,000 spent almost three times as much as people who make over $50,000.

Is that how we want to balance our budget, getting the poorest people in the state to pay three times as much as middle class folks?

Easley also tells the Charlotte Observer that lotteries are a lot more popular than taxes. Let’s see, mislead the people about the lottery for four years with the help of lottery companies who stand to make hundreds of millions of dollars if the lottery passes, and run a campaign for governor stressing how bad taxes are.

Lotteries would be more popular than general taxes anyway, but Easley has done his share of making sure that is true.

The theme of this coming inauguration weekend is “Fulfilling the Promise: One North Carolina.”

Given Easley’s insistence on the exploitative lottery, unless things change pretty soon, the theme of this coming year in the state may well be, “North Carolina’s Poor: Paying for tax cuts and getting fewer services.

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This entry was posted on Tuesday, January 11th, 2005 at 2:41 pm and is filed under Fitzsimon File. You can follow any responses to this entry through the RSS 2.0 feed.