Gambling with our schools

by Jim Longworth

Earlier this month, lawmakers determined that poker should be illegal because it is a game of chance. Ironically, these same politicians approved the state lottery, which is the biggest game of chance ever invented.

In fact, according to the Mises Institute, your chances of winning a six-figure state lottery are one in 14 million. So what’s the real reason poker is illegal and the lottery is not? It’s simple. The state can’t tax or control the funds from poker.

And so, Gov. Mike Easley sold lawmakers on the lottery as a cash cow, while he sold voters on the benefits for schools – $438 million worth of benefits to be exact. But last week, state lottery officials reported that the games will only generate $341 million in education funds for the next fiscal year. That’s a $107  million dollar shortfall. And that follows the lottery’s first year, which also missed projections by $100 million.

So what’s the big deal? Isn’t the governor entitled to make a mistake? Actually, in this case he’s not. That’s because two years ago he ignored credible data which warned of shortfalls, and even worse consequences.

In March 2005, the NC Justice Center released a report that Easley should have heeded. Among their findings:

1. The gap in spending for public education between lottery states and non-lottery states has remained virtually unchanged since 1960. The conclusion, which was supported by the Stennis Institute of Government, is that earmarking lottery proceeds does not result in greater resources for public schools.    

2. The rate of growth in per-pupil spending on education declines significantly after a one-time boost when a lottery is adopted. The State and Local Government Review found in the 23 states which earmark lottery proceeds for education that, prior to enacting a lottery, states typically increased per pupil spending by 12 percent. After enactment, school funding received a one-time boost of $52 per pupil. But long term, the funding level growth rate averaged just 6 percent. 

3. A lottery has the potential to have a negative impact on public support for local efforts to raise additional revenues. The Justice Center cited a case study in Florida where, prior to passing a lottery, voters had approved 21 of 22 bond issues. After enacting the lottery, only three of the next 15 bond issues were approved. Many respondents – 80 percent of them – told the St. Petersburg Times that they rejected subsequent bonds because they thought the lottery was paying for schools.  

No one knows for sure why Easley ignored this and other research which warned of serious consequences of enacting a lottery and counting on its proceeds to fund education. We do know that Easley, just like several other governors, used the prospect of a lottery to get elected, (and then re-elected). After all, voters love the lottery. But Easley’s pandering is now starting to negatively impact our schools, and the future isn’t looking any brighter in that regard.

So what can we do to avoid the same mistakes that have befallen other states? Mainly, we need to stop projecting lottery revenues, and we need to stop depending on those revenues to keep our schools operational. Then, if and when proceeds roll in, the legislature can allocate them as a bonus for schools. Local school systems would know not to expect anything, and lawmakers would know not to reduce standard line item funding from annual tax coffers. And with a little bit of promotion and awareness, voters would come to realize that the lottery does not pay for education. Any further delay in implementing this course correction could result in irreparable harm to the fiscal health of our schools.

Despite what our governor thinks, the lottery is a game of chance, and while I’m not opposed to gambling in any form, I am against politicians gambling with the long term needs of our children.It’s time to change the House rules, and give our schools better odds. 

Jim Longworth is host of “Triad Today,” which can be seen Friday mornings at 6:30 a.m. on ABC 45 (cable channel 7), and Sunday nights at 10 p.m. on MY48 (cable channel 15).