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Lottery: Promises and pitfalls

North Carolina LotteryNorth Carolina Lottery: Lottery: Promises and pitfalls

A look at problems and solutions of some state lotteries, as North Carolina leaders try to predict their own problems to come.

Art Johnson isn't a big gambler but plays the Florida lottery on occasion. No, not because it will help the Palm Beach County School District, where he is superintendent.

"I want to win," Johnson said with a laugh.

Ask him about the lottery's funding for education and Johnson is a lot less jovial.

"I'm unimpressed," said the former principal and school board member who now heads the ninth-largest district in the country.

A lot of school administrators have been "unimpressed" with state-run lotteries and their promised windfall for education. More often than not, they say, lottery revenue simply takes the place of tax dollars that were already being spent on schools.

Only one state — Georgia — is consistently cited as having adequately safeguarded its lottery revenue.

But right now, North Carolina does not have those same safeguards in place. With money expected to start flowing from the lottery to state coffers next year, experts say Tar Heel legislators will have to decide soon whether to follow Georgia's example — or potentially leave local school leaders unimpressed.

The problem


The Middle School portion is going up. The Northern Middle School/High School complex is currently under consrtuction, in Greensboro, NC, Wednesday Dec. 14, 2005.

Bob Scott was busy looking for ways to trim the budget at his Avon Lake School District in northeast Ohio, just west of Cleveland. Money from state and local government fell short of the district's needs, he said, and midyear budget trimming was needed.

Scott grimaced when asked why proceeds from Ohio's lottery didn't help schools avoid that type of situation.

"The money comes in (from the lottery), but the legislature can just take it right out on the other side," Scott said.

Since Ohio lottery revenue is mixed in with state tax dollars before being sent to school districts, it's impossible to show whether Ohio is spending more or less on schools than it would have without the lottery. Educators such as Scott say lottery money has merely taken the place of tax dollars, instead of bolstering education spending as promised.

They are not alone.

In 1998, Carl McCall, then-comptroller for the state of New York, called the idea that lotteries augment education spending "a myth" in a letter that accompanied an audit of how the state spent lottery money.

"Lottery money has never supplemented state aid; it doesn't today and it likely never will," McCall wrote.

Palm Beach's Johnson confirmed that was the case in Florida.

"Over time, you will see shortfalls in other areas being covered by dollars that would have otherwise gone to education," he said.

Rodney Stanley, a public administration professor at the University of Tennessee's Institute of Government, has written peer-reviewed papers that show lottery dollars do provide an initial short-term boost to state education spending.

But in almost all cases, he said, inflation and the cyclic nature of state budgets eat away at those gains.

"In my professional opinion," he said, "if you're going to have a lottery, it needs to look like Georgia's."

Georgia on their minds


The Middle School portion is going up. The Northern Middle School/High School complex is currently under consrtuction, in Greensboro, NC, Wednesday Dec. 14, 2005.

Before the first lottery ticket was sold in Georgia, voters put a constitutional amendment in place that requires that lottery revenue go toward certain education programs — a statewide pre-kindergarten program, upgrading computer technology and a college scholarship fund.

"It's very transparent that the money they're getting from the lottery is going toward education," said Joseph McCrary, a former research director at the Carl Vinson Institute of Government at the University of Georgia.

It also makes it easier to see if the state cuts back on other sources of funding. Clearly showing the lottery was benefiting students brought some skeptics around, McCrary said.

"It makes people more accepting of the lottery," he said. "One of the things that we found in our surveys is that if the lottery money didn't go for education, people wouldn't support it."

But other states, including Ohio, have had constitutional amendments earmarking the money for education.

Georgia was successful, observers say, because its lottery money was used to create popular programs that the state had never funded. That made it easy to track the money and made sure legislators kept their hands off it.

"We just can't leave it to the legislature annually to determine what kind of restrictions or limitation there might or might not be put in place," said Margaret Carnes, managing director of Charlotte Advocates for Education.

The nonprofit group has researched lottery funding in other states. It has joined with similar nonprofits across North Carolina, including the Guilford Educational Alliance, to mount a public education campaign and lobby for similar safeguards here.

They will likely find both help and hindrance in high places.

The debate at home


Brad Heinzen, site project manager. The Northern Middle School/High School complex is currently under consrtuction, in Greensboro, NC, Wednesday Dec. 14, 2005.

Since the lottery passed this summer, Gov. Mike Easley has said he supports creating a constitutional amendment for North Carolina similar to Georgia's.

It's a sentiment echoed by some of the lottery's biggest legislative supporters.

"We do not want to view the lottery as just another revenue source," said Sen. Tony Rand, a Fayetteville Democrat who helped navigate the lottery through dicey political waters.

"We need to view it as a dedicated source of money that goes where we said it was going to go when we passed the legislation — to education."

North Carolina's lottery law does require the money to go toward certain education programs: helping local districts with school construction, college scholarships, pre-kindergarten programs and class-size reduction.

But laws can be changed during any session of the legislature and there are legislators who say they are not sure they want to handcuff lottery proceeds with a constitutional amendment.

"We ought to give the lottery a run before we start tinkering with it," said Sen. Kay Hagan, a Greensboro Democrat who leads the committee that drafts the state budget. "My initial reaction is that the constitution is a document that should be amended in the fewest possible cases."

She said lottery proceeds should go toward education. But in times of crises, such as a natural disaster, the state needs flexibility to shift revenue streams to cover unexpected expenses, Hagan said.

Even if the state passes a constitutional amendment, there are other potential pitfalls for North Carolina.

Carnes said that the school-construction funding and college-scholarship programs are ideal places to put the money because the state traditionally doesn't spend money on those things.

But because the state already pays for some pre-kindergarten programs and teacher salaries, lottery money spent in those areas could end up just replacing tax dollars rather than boosting spending.

Even Georgia, the model state, has had problems. Lottery-funded programs have been victims of their own success. Demand for the state's HOPE scholarships is out-stripping revenue produced by the game.

The bottom line, say those with experience in handling lottery funding, is that state officials must be careful in how they handle lottery dollars and they must be realistic in setting their expectations.

"Don't let the politicians tell people it's going to be the salvation, the panacea that's going to save education," said Palm Beach's Johnson. "They're going to do it anyway, and at least some of the public will believe them. So you just have to get the facts out."


The Middle School portion is going up. The Northern Middle School/High School complex is currently under consrtuction, in Greensboro, NC, Wednesday Dec. 14, 2005.

The Northern Middle School/High School complex is currently under consrtuction, in Greensboro, NC, Wednesday Dec. 14, 2005.

Greensboro News Record

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9 comments. Last comment 11 years ago by Rip Snorter.
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New Mexico
United States
Member #12305
March 10, 2005
2984 Posts
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Posted: December 26, 2005, 9:03 am - IP Logged

"It makes people more accepting of the lottery," he said. "One of the things that we found in our surveys is that if the lottery money didn't go for education, people wouldn't support it."

If that's the smoke and mirrors trick it takes to cause voters to allow lotteries to exist, let her rip.  The 'support' side of the equation almost certainly involves political rhetoric.  On the side where someone plunks down a buck for a ticket 'support' doesn't have a thing to do with where the money ends up.  Those players are hoping for the draw and what's hidden underneath the scratch.

Same as this school superintendent, when he buys his tickets.

Spending more money to build more school houses to not teach kids reading writing and cyphering doesn't much matter where the money comes from out of the pool of revenues.  So long as it keeps them off the streets for twelve more years while they're not learning, who cares?

Jack

Absorb the good, ignore the bad, weigh the ugly.

It's about number behavior.

Egos don't count.

 

Dedicated to the memory of Big Loooser

 

    JAP69's avatar - alas
    South Carolina
    United States
    Member #6
    November 4, 2001
    8790 Posts
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    Posted: December 26, 2005, 9:03 am - IP Logged

    Yep, When they put the lottery money into the states education budget the state diverts regular tax revenue meant for education to other areas. The school districts may see a bit more money but not all that is intended to go to the schools.

    WHATT

      Todd's avatar - Cylon 2.gif
      Chief Bottle Washer
      New Jersey
      United States
      Member #1
      May 31, 2000
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      Posted: December 26, 2005, 9:11 am - IP Logged

      Yep, When they put the lottery money into the states education budget the state diverts regular tax revenue meant for education to other areas. The school districts may see a bit more money but not all that is intended to go to the schools.

      I agree.

      The other thing that happens is that money that was previously going to education is diverted to some other entitlement program, so the net result is that more money is wasted, and education becomes almost solely reliant upon lottery revenues.

      That, in turn, makes the lottery revenue critically important to the state budget, which ultimately makes the lottery go to extreme lengths to keep revenue increasing from year to year. 

      Think about what happened in Texas, with the lottery director making the jackpots artificially high, just to increase revenue.  That wouldn't happen unless he was under extreme pressure to increase revenues.

      This is why I'm never impressed by do-gooder legislators who claim that the lottery is an "education lottery".  That's bull.  I'd rather have revenues go to typically under-funded things, like how Pennsylvania puts all the revenues towards the elderly.  That is a wonderful use of lottery revenues, and it doesn't use the kids as a political tool to make the lottery "look" better.

       

      Check the State Lottery Report Card
      What grade did your lottery earn?

       

      Sign the Petition for True Lottery Drawings
      Help eliminate computerized drawings!

        MADDOG10's avatar - smoke
        Beautiful Florida
        United States
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        July 18, 2004
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        Posted: December 26, 2005, 9:52 am - IP Logged

        It's the same scenerio, in each and every state that has a lottery with the exception of a few. If only they could see the "trees through the forest", and follow it up as it was intended to do instead of creating the pitfalls as so many have done. The legislators talk about being able to divert funds earmarked for education for things such as disasters and so on. Have they even asked themselves what did they do before they had a lottery?

        The states need to stop using the lottery as a "crutch" and do what they're supposed to do. For every politician that follows through with their promises, I'll show you a "comedian" without relief. 

          Avatar
          Sparta, NJ
          United States
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          July 9, 2005
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          Posted: December 26, 2005, 10:48 am - IP Logged

          Politicians see revenue as a spendable asset - first to ensure their stature, then for the public; ocassionally the two can be combined.  The same thing they did with all the tobacco money passed out.   If some one hadn't created the term "the lottery" they would have eventually found another excuse to get more revenue.  You can argue all day that the lottery is not a tax, but it serves the same purpose, get the politician additional revenue to spend.  Put a restriction on spending.  Thats a joke.

          Cheers

          |||::> *'`*:-.,_,.-:*''*:--->>> Chewie  <<<---.*''*:-.,_,.-:*''* <:::|||

          I only trust myself - and that's a questionable choice

            Avatar
            Columbia City, Indiana
            United States
            Member #2978
            December 9, 2003
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            Posted: December 26, 2005, 11:47 am - IP Logged

            Rip Snorter said: 

            "If that's the smoke and mirrors trick it takes to cause voters to allow lotteries to exist, let her rip.  The 'support' side of the equation almost certainly involves political rhetoric."

            ___________________________________________________________________________________

            You're absolutely right, Jack. "Political Rhetoric." What a wonderful term that is! We use it to describe what the politicians regurgitate during their bids for public office, and the politicians use it to undermine the promises made by the opposing candidates. Here are some similes: "Tap Dancing," "Creative Oratory," "Sidestepping," "Covering My Butt" and "Being Misquoted Out Of Context," all of which are normally called "Lying."

            There is a movement afoot by our civic leaders to draft legislation to require "Voter Qualification" for all registered voters. However, there is currently no proposal anywhere which would require the same thing of our political candidates. Somehow, we've been forced to bear the responsibility for their bad decisions and shortcomings, and we've become so jaded to scandals and crooked politicians that we now truly believe we're responsible for their perpetual ineptitude! 

            Our government, on all levels, has become a millionaires' club whose members represent and cater to other millionaires, and whichever special-interest group happens to be popular at the moment. I think anyone would be hard-pressed to find a working-class congressman, senator or governor these days, but maybe it's time we stop listening to their "political rhetoric" and elect people to public office based solely on their qualifications for the job.

            We cannot allow them to exempt themselves from the very laws they draft and enact. We are citizens, not their royal subjects, and they all need to be reminded that being elected doesn't make them better than the rest of us. We elect "one of us" to political office to represent the interests of the "rest of us," but when he moves in, he becomes "one of them," and is then issued his own set of smoke and mirrors.

            They're not going to stop this; any official who tries would commit political suicide. We have to stop it. We have to step up and toss them out when they screw up the first time, before they can make things worse. We need to prosecute them when criminal behavior is discovered, sending a clear message to others who would make a bid for political office, and the penalties should be no more nor less severe than those suffered by any other criminal of the same ilk. If our lawmakers are not subject to the same penalties provided by the laws by which we're governed, how can they pretend to "represent" us?

            "Recall Elections." That should be the new catch phrase of this decade.

            Come, Pinky; we must prepare for tomorrow night...

            Jim

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              New Mexico
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              Posted: December 26, 2005, 6:16 pm - IP Logged

              Hi Jim:

              Winchester Shooting Irons used to have an advertising poster picturing an NA in a warbonnet sporting a trade musket with a lot of brass tack designs on the face of the stock.  The caption read, "Winchester makes good Indians".

              During an earlier phase of my life I went through a stage of holding the opinion Winchester would also make good politicians.  But frankly, I don't believe it anymore.  I don't believe there's anything that would make good politicians in the current political environment. 

              Short of breaking the nation up into small, mostly autonomous units of the Greek City/State variety and having direct involvement between all citizens and the folks they choose to lead them, I don't think it can happen.

              The classical Greeks kept their elected officials in line by executing them when they behaved in ways destructive to the public good.

              I believe that would make good politicians, honest ones, prudent ones.

              Not much else I can think of would do it.

              Jack

              Absorb the good, ignore the bad, weigh the ugly.

              It's about number behavior.

              Egos don't count.

               

              Dedicated to the memory of Big Loooser

               

                Avatar
                Columbia City, Indiana
                United States
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                December 9, 2003
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                Posted: December 27, 2005, 10:13 am - IP Logged

                Rip Snorter said: 

                "The classical Greeks kept their elected officials in line by executing them when they behaved in ways destructive to the public good."

                ____________________________________________________________________________________

                Well, this certainly seems like it would work.

                Capital punishment has long been touted by politicians as a deterrent to violent crime, despite statistics which prove otherwise, so I can think of no reason why they should object to such a policy.

                One problem, though: who do we contact to sponsor this bill?

                 

                Come, Pinky; we must prepare for tomorrow night...

                Jim

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                  New Mexico
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                  March 10, 2005
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                  Posted: December 27, 2005, 10:25 am - IP Logged

                  Hi Jim.

                  I can see that would require some study.

                  J

                  Absorb the good, ignore the bad, weigh the ugly.

                  It's about number behavior.

                  Egos don't count.

                   

                  Dedicated to the memory of Big Loooser