Lawmakers do the hokey-poke with lottery funds
By L.A. Williams, Correspondent
Christian Action League
RALEIGH — “You put your ticket money in; they take some prize money out; they mark the rest for education but then they shift it all about …”
The lottery hokey-pokey has become an all too familiar dance in Raleigh since 2005 when lawmakers created a state-run gambling program with promises, pledges and pleas — “it’s all for education!” — and then proceeded with a budgeting shell game that makes it next to impossible to tell if any additional funding ever actually makes it to the classroom.
“Anyone who believed then that the lottery would bring extra money to schools rather than just supplant tax dollars should be better educated now,” said the Rev. Mark Creech, executive director of the Christian Action League. “We’re following the path of virtually every state that has enacted a lottery, adding some of the proceeds to the chosen beneficiary and then taking away much of the tax money designated for that cause in the first place. It’s like every other kind of gambling — in the long run, there simply are no winners.”
The Greensboro News and Record reported earlier this month at least three ways that this year’s $19 billion state budget uses lottery funds to replace tax dollars:
• holding $35 million in unclaimed prize money and excess receipts to help plug the anticipated budget gap if Congress doesn’t boost Medicaid funding.
• shifting $63 million away from school construction into class-size reduction.
• authorizing counties to reallocate money they do receive for school construction to pay for classroom teachers.
North Carolina’s lottery was set up so that at least 50 percent of the money generated by ticket sales goes to prizes, 8 percent to administrative costs, and 7 percent to retailers, leaving 35 percent to go to education, with half of that earmarked for reducing class size ratios. The remainder is to be used for construction (40 percent of the education proceeds) and college scholarships (the final 10 percent). The lottery Web site shows total pay-outs to education between July 1, 2008 and June 30, 2009 to be some $390.6 million.
That total represents just 5 percent of the $7.35 billion that the state used to fund public education last year (2009-2010), the same year that state appropriations were reduced by $840 million. In fact, over the past four years the percentage of the state’s general fund going to education has decreased from more than 52 percent to 35 percent. The decline puts North Carolina in the same boat with most other lottery states according to a CBS investigation in 2007 that showed the percentage of state spending on education down or flat in 21 of 24 states that tout “education” lotteries.
Gov. Bev Perdue started the shift in funds in North Carolina by transferring $50 million from the lottery reserve fund to the general fund in early 2009 and then taking $38 million more that had been allocated to counties for school construction to help balance the state budget. She justified this year’s continued shuffling of funds by explaining to the media that “sometimes you have to do what you have to do.”
Similarly, Rep. Maggie Jeffus (D-Guilford) defended the state budget, telling the News-Record that we’re in “extremely unusual circumstances this year” that warrant “unusual decision-making.”
But Rob Schofield, with N.C. Policy Watch, told the newspaper that the lottery has become “what we always thought it would be — just another source of revenue for the state, a very regressive and ill-conceived way to raise money.”