Commentary, News

Yet another story shines an unflattering light on the NC lottery

LotteryThe Joint Legislative Oversight Committee on the North Carolina State Lottery meets this morning in Raleigh. Let’s hope this new article by reporter Jessi Stone of the Smoky Mountain News (“Little help from the lottery: N.C.’s education games falling short of promises”) is on everyone’s desk. As Stone reports:

Over the last nine years, the lottery has contributed $4 billion to K-12 education —funding school construction, pre-K programs, college scholarships and keeping teachers in the classrooms.

The state may tout that $4 billion has gone to education, but school officials say that number can be a bit disingenuous.

Bill Nolte, associate superintendent for Haywood County Schools, said lottery funding was supposed to provide additional funding for education, but it seems like every year legislators are budgeting less for education from the general fund and relying on lottery funds to make up the difference. Before the lottery was created, the counties received state funding for capital projects through the ADM (average daily membership) allotment, but now that money has disappeared.

“ADM is what the state used to give us, but that went away and they supplanted that with lottery funds,” Nolte said. “In an ideal world they would have not supplanted the ADM and they would have given us the lottery funds. And as sales increased across the state, funding would increase, but instead it’s been cut in half.”

Looking at the amount of lottery funding Haywood County has received for capital projects over the last nine years, the numbers have been all over the board. The county started out getting $373,459 in 2007 and received just over $1 million in 2011 when the state was receiving federal stimulus dollars, but that allocation was cut in half the next year. Haywood County is expecting to receive only $179,000 in 2016. The uncertainty in funding makes it difficult for the school system to rely on lottery funds for maintenance or construction projects….

So where is the general fund money going if it isn’t going toward education?

[Rep. Joe Sam] Queen said he knows exactly where it’s going.

“The lottery was sold to the public as extra money for education, but Republican legislators have cut the base funding and supplanted the revenue from the lottery, so the net hasn’t been positive for education,” he said. “And that base funding has been given away in tax cuts to the wealthiest individuals and corporations in North Carolina.”

Queen said Republican legislators have been deceptive in saying that education spending has increased over the last few years while the party has been in the majority in Raleigh.

“They’ve been cutting education for the last two years and back-filled it with lottery money,” he said. “And they haven’t even restored the funding cuts that were necessary during the recession.”

During the recession, North Carolina befitted from more than $15 million in federal stimulus money. Nearly $3 million of that went to the Department of Public Instruction, but after that money dried up and the state budget began to recover, the education budget never did.

The bottom line: The lottery has been a boondoggle from the start — both in the deception that is so ingrained in its marketing and education messages and in the regressive way it raises money. If North Carolina wants to have a publicly-run gambling enterprise, that’s fine, but it would be better off to put all of the money into prizes and dispense with the deception and regressivity that are inherent in the current system.

Click here to read Stone’s story.

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Charlotte radio host on lottery proposal and “downright nutty words”

ICYMI, Keith Larson of WBT radio in Charlotte has an entertaining post in the Charlotte Observer on the House lottery scheme entitled “Some of the nuttiest words I’ve typed in 12 years here.” As Larson notes:

“House Republicans want to give teachers their raise by doubling the advertising budget for the so-called Education Lottery. Yes, I actually typed those words. They are some of the most downright nutty words to come my way in 12 years here but they are true. And you actually did just read them. If they are not some of the most downright nutty words you’ve ever read, then you’re reading really funny stuff.

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Editorial: House budget another bad bet

The House plan to fund teacher raises with increased lottery revenues continues to meet with widespread derision. ICYMI, the Greensboro News & Record weighed in over the weekend:

“When it comes to raising teacher pay, the state House has almost trumped the Senate for bad ideas.

The Senate offers 11 percent salary hikes, on average, but only for teachers who surrender tenure rights. And about half of the money comes from laying off thousands of teacher assistants.

The House provides 5 percent raises with no strings attached and without eliminating teacher assistants. Unfortunately, to pay for it, the House bets that the state lottery can pull in an additional $106 million next year. To make that happen, it authorizes the Lottery Commission to double its spending on advertising.

What a lesson for our children.

The trouble is, the lottery appeals most strongly to people who can least afford to pay. Furthermore, it provides an unreliable revenue stream. When North Carolina’s participation in a state lottery was debated in 2005, opponents used both arguments. And nearly all Republicans in the legislature voted against it. But Democrats were in the majority then, and they enacted the lottery.

Now, not only do Republican House leaders aim to rely on lottery revenue to fund an ongoing obligation — teacher salaries — they want to drum up more of it….”

Read the rest of the editorial by clicking here.

 

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Editorial: House makes foolish gamble with lottery

Raleigh’s News & Observer joins the growing list of voices to condemn the state House’s decision to attempt squeeze more money out of the vulnerable by increasing lottery advertising efforts to raise teacher pay:

“What’s next for Republican leaders of the state House? It’s a tantalizing question because their ideas, or perhaps that should be notions, about what to do to raise teacher pay are truly strange.

Sorry, but it’s hard to take seriously the House’s pay hike plan for teachers. The House’s proposed budget would give teachers about 5 percent more by boosting advertising for the state lottery. The idea is that more advertising will lure more people into the games, and their losses will become the teachers’ gain.

How is Speaker Thom Tillis going to address other revenue shortfalls? A rabbit out of the hat maybe? Or perhaps he’ll charge for a traveling stage show wherein he saws Gov. Pat McCrory in half.

A good many Republicans and Democrats seemed to be doing a double-take when it came out that the lower chamber’s budget figured to bump lottery advertising to 2 percent of sales instead of 1 percent. With more marketing, officials figure, the lottery would bring in substantially more money. The last fiscal year figure for net proceeds was about $480 million.”

Read the rest of the editorial by clicking here.

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N.C. lottery finds sales hook in new state income tax rate

The N.C. Education Lottery had an unusual sales pitch today, telling players that hitting it big in 2014 will mean less taxes and more winnings

In a tweet sent out this afternoon, the official state lottery Twitter account pointed out that the state’s new flat 5.8 percent income tax, which eliminated a progressive tax structure where the poorest pay a lower percentage of income taxes than those with higher incomes, is a bonus for lottery winners.

lotterytweet

The tweet links to two news releases put out by the state-run lottery that showcases how a Rocky Mount man with a $1 million Powerball ticket and a firefighter in the western part of the state are paying $7,000 to $12,000 less in income taxes in 2014 than they would have if they won in 2013.

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