Editorial By Asheville Citizen-Times
published February 19, 2006
The North Carolina Lottery may bring extra money into state coffers, but the questionable ethics surrounding its inception and the controversies it continues to generate raise serious questions about whether the cost outweighs the value.
Last week two new conflicts presented themselves. The first confirms the worst suspicions of many lottery opponents and the fears of some lottery supporters. The second is a slap in the face to Western North Carolinians who supported the lottery and one more reason to question the role House Speaker Jim Black played in crafting the lottery bill.
Fears that lottery money would be used to supplant rather than augment state spending on education were confirmed as a result of meetings between State Auditor Les Merritt and representatives of Gov. Mike Easley.
During the meetings Easley officials readily admitted that up to half of lottery proceeds won't be treated as additional money, but will be used to replace roughly $200 million now being spent to reduce class sizes in lower grades and help at-risk pre-kindergartners, both of which are Easley initiatives.
This, despite the fact that the lottery bill Easley signed on Aug. 31 promised that proceeds would not replace existing school revenue but would add to it. But, according to the Raleigh News & Observer, the state budget Easley signed two weeks earlier trumps the lottery bill and it did not include that promise.
In Easley's defense, he came into office advocating a lottery to pay for the education programs he wanted. Lawmakers appropriated money to support the programs from the General Fund. It seems Easley now wants to replace that money. According to the News & Observer, in a recent presentation to debt-rating agencies, state budget planners said $210 million of lottery proceeds would "replace General Fund fronting" of existing expenditures for the pre-kindergarten program More at Four and the reduction of class sizes through third grade.
That doesn't change the fact that many people feel they were deceived.
"In all likelihood, the public was hoodwinked," said Elaine Mejia, director of the N.C. Budget and Tax Center in Raleigh, which opposed the lottery. "If the governor had said this will support education programs already in place, I doubt it would have passed."
Easley's fiscal adviser Dan Gerlach told the News & Observer that the General Fund money now going to More at Four and class reduction, which will be supplanted by lottery revenue, will go for other education spending including increases in teacher pay. If that's what happens, the net effect will be an increase in education spending, as was promised by the lottery bill.
Regardless, the controversy heightens the perception that it took a great deal of sleight of hand to pass the bill in the first place and only adds to the angst surrounding it.
West loses out
But for WNC, even more disturbing news came in the revelation that Western North Carolina school districts will get less money from lottery profits than systems in 51 other counties in the state under a provision of the law that created the lottery.
The provision sets aside more than a third of the 40 percent of lottery profits that will be distributed to counties for school construction for the 51 counties whose property tax rates exceed the state average.
"No county in Western North Carolina gets a dime of that money," said Roger Aiken, a member of the Buncombe County Board of Education.
The idea was to help counties where residents pay higher property taxes, since those taxes generally go to school construction, according to Senate Majority Leader Tony Rand.
Whatever the intent, the effect will be to deprive Western North Carolina, which has seven counties considered low wealth, from receiving a penny of the money while Mecklenburg, represented by House Speaker Jim Black, stands to gain $9 million annually, even though it is not considered low wealth.
Aiken is right in asserting the unfairness of such an arrangement.
"Mecklenburg is in a better position to pay for their schools than a lot of counties in Western North Carolina," he said.
More to the point, Western North Carolinians will buy lottery tickets just as will the residents of the 51 counties slated to get the extra money. And they should receive their fair share of the proceeds.
Apparently, the provision caught WNC lawmakers off guard.
"I don't know that one single member of the western delegation (in the General Assembly) really realized the seriousness of it or the fallout," said Rep. Wilma Sherrill, R-Buncombe. "We're going to explore it and see if there is anything we can do or should do."
WNC lawmakers should indeed explore iwhat happened and do everything in their power to change the way the capital expenditure money is distributed. They owe their constituents that, at least, for being asleep at the wheel when such important legislation was being passed.
It would be different if the money were being targeted to poor counties such as those involved in the Leandro lawsuit, where students are clearly receiving a substandard education. That's obviously not the case, however.
It is outrageous to deprive western counties like Rutherford, where the unemployment rate is 8.3 percent, of a significant portion of the proceeds from the lottery their purchases will help to support in order to subsidize counties like Mecklenburg, where the unemployment rate is less than half that, at 4.1 percent.