Fitzsimon File

It has now been 10 days since House Speaker Jim Black announced that the
House would vote on a lottery in the next six weeks, the lottery on its
own, without a referendum.

There have been new developments in the lottery debate, new reasons for
lawmakers to defeat the lottery—a new analysis of the lottery impact
on education funding and heated debates over lottery resolutions at
county commission meetings at opposite ends of the state.

As a public service for lawmakers, the Fitzsimon File presents just 8 of
the many reasons that North Carolina should not get into the predatory
gambling business.

1) Lotteries don’t help education. A new report from the Budget and Tax
Center finds that establishing a lottery for education doesn’t
necessarily mean more funding for public schools. Lotteries for
education also make it much more difficult for states to pass bond
issues for schools. The Superintendent of Education in California says
that the lottery there has “done more to hurt education than anything.”

2) The lottery is regressive. The National Gambling Impact Study
Commission’s 1999 report found that the poor spend more on the lottery
than people in the middle class. That means the poor spend dramatically
more as a percentage of their income. Why should the poor pay more
because lawmakers can’t find the courage to raise taxes fairly?

3) The success of the lottery depends on increasingly aggressive
advertising that often preys on the poor. Think about it. When the
novelty of the lottery wears off, people don’t play as often. That means
more advertising to earn the same revenue. It logically means targeting
people who are mostly likely to play the lottery, the poor, with more
lottery outlets in poor areas and ads promising a way out of poverty.

4) The revenue from a lottery is unreliable. It is difficult to
accurately predict how much money a lottery will raise for the state,
making it difficult to plan for education programs based on dollars from
a lottery.

5) There has never been debate about the lottery, just about where the
money should go. Governor Easley calls it an education lottery; others
talk about how much the lottery could help with environmental projects
or school construction. State lawmakers have never held a thorough
debate on the mechanics of the lottery, how it raises money and from
whom.

6) The public might be more skeptical of the lottery than we think.
Recent efforts to pass lottery resolutions by county commissioners in
Martin County and Alexander County have failed. Lottery polls never
include information about regressivity or advertising.

7) Claims about lottery revenue are inconsistent. Lottery proponents
like to say that $250 million is crossing the borders to other states.
But North Carolina would at most get a third of that money if it was
spent here. Even with a lottery in North Carolina, people on the borders
of other lottery states might still buy tickets in those other states if
the jackpots were bigger or the games were better.

Lottery supporters always say that a North Carolina lottery would raise
$350 million for the state out of gross lottery sales of $1 billion. But
no one ever includes the loss of revenue to the state and local
governments by taking $1 billion out of the economy. People are
currently spending that money on other things, most of which are taxed.
Not to mention the jobs that money currently supports.

8) Dan Gerlach. Governor Easley’s senior budget adviser is likely to be
Easley’s chief lottery lobbyist in the General Assembly. Lawmakers
ought to ask Gerlach about his work on the issue when he ran the Budget
and Tax Center. Here is a sample of that Dan Gerlach on the lottery.

October 3, 2001.

“the lottery tax is more unfair that the regressive sales tax or other
sin taxes.”

“The North Carolina lottery would be supplanting existing spending.”

January 31, 2001

“While the inequity of the lottery tax and its questionable morality
dominate the opposition’s arguments, the lottery isn’t good for
education.”

“Why risk something as important as education on this bad bet?”

Why indeed?

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This entry was posted on Tuesday, March 22nd, 2005 at 7:34 am and is filed under Fitzsimon File. You can follow any responses to this entry through the RSS 2.0 feed.