By L.A. Williams, Correspondent
Christian Action League of North Carolina
September 5, 2008
RALEIGH – The latest news about North Carolina’s so-called “Education” Lottery is not exactly surprising; in fact, it’s about as close as you can get to a sure bet. Lottery revenues, it seems, may not actually be increasing state funding for education, but could be simply replacing dollars already earmarked for Tar Heel schools.
That’s the fear of the North Carolina Lottery Oversight Committee, and the exact prediction of lottery opponents who sounded the alarm prior to the General Assembly’s enacting of the state-sponsored gambling in 2005.
“The Lottery Oversight Committee is observing what we have warned lawmakers about all along: it is practically inevitable that the lottery will be used to supplant, instead of supplement, education funding,” wrote John Rustin, the North Carolina Family Policy Council’s vice president and director of government relations in a recent report. “While lottery revenues may be used to directly fund education programs and services, the General Fund dollars that normally would have been dedicated to those programs and services are diverted elsewhere. This is a textbook example of supplanting through the lottery.”
The committee, which includes education and finance experts chosen by lawmakers and Gov. Mike Easley, is co-chaired by Myron Coulter, a former Western Carolina University chancellor who told the media that there is evidence of “a substantial degree of supplanting and not 100 percent supplementing.”
Among the group’s concerns are the fact that the legislature did not allocate any general fund money for More at Four two years ago and the lack of significant bottom-line funding increases for additional teachers to reduce class size in elementary schools.
North Carolina’s lottery was set up so that 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, 2006 and June 30, 2007 to be $315.5 million.
Despite those revenues, North Carolina public classrooms still have an 18-to-1 student/teacher ratio, the same ratio they’ve maintained since 2003, two years before the lottery was passed.
Countering the criticism, Gov. Easley told the press he always planned to pay for More at Four with the lottery funds, and his budget adviser Dan Gerlach contends that the committee is looking at “one piece of the education puzzle, but not the whole puzzle.”
Puzzle or not, the pieces point to the warnings issued by the Christian Action League of North Carolina and other organizations who opposed the lottery from the start. Quite simply, research shows that state lotteries have not proven to be good funding sources for education.
“We take no joy in saying ‘we told you so,’ in this matter,” said the Rev. Mark Creech, executive director of the Christian Action League. “But the record is clear. Lotteries – immoral to begin with – are also fiscally irresponsible. Plus, they never bring in enough funding to begin to make up for the damage done as compulsive gamblers add billions to the financial burdens of the taxpayers.”
A sixth-month investigation by “Money” magazine revealed that state lotteries have neither lowered taxes for residents nor boosted funding for education. In fact, according to Peter Keating’s article “Lotto Fever: We All Lose!” since 1990 spending devoted to education has actually decreased in lottery states, while increasing in non-lottery states.
At best, according to Thomas A. Garrett, senior economist at the Federal Reserve Bank of St. Louis, “The level of education expenditures after a lottery is no different than before.”
The problems North Carolina is now facing are just like those reported in the past in California, Florida, Michigan and other lottery states. Two years ago, State Auditor Les Merritt warned that the lottery legislation didn’t include enough safeguards to keep lawmakers from pulling the same shell game here, shuffling general funds away from education as soon as lottery revenues began to come in.
And in South Carolina, those studying the issue are realizing that the lottery is far from the panacea it was promoted to be. According to an April article in The State newspaper, instead of meeting the growing needs of public schools, the S.C. lottery has “eroded public support for education funding,” perhaps another warning of what’s to come in the Tar Heel state.