Would Orange Play the Lottery?

I think John Hood is referring to numbers provided in a John Locke Foundation report:

http://www.johnlocke.org/spotlights/2001022738.html

The Chapel Hill Herald's recent forum for candidates in the House 50 and Senate 23 General Assembly races will be playing in two parts on WCHL 1360 AM on Monday and Tuesday. Both segments will start at 10 a.m. The forum featured a very lively exchange between the four candidates who attended -- Bill Faison, Barry Jacobs, Ellie Kinnaird and Joel Knight -- on the lottery, cigarette taxes and horse racing(!). It is well worth a listen.

The notion that hundreds of millions of dollars are flowing out of North Carolina into the coffers of neighboring states because of our absence of a lottery is a fiction. Only about a third of each dollar spent on a lottery is captured by a state as revenue. Half of the money flows out in the form of prizes -- so, over time at least, about half of the money spent by North Carolinians elsewhere is won by North Carolinians as prize money and returned to NC (and taxed, by the way). The remaining sliver goes to finance administration, much of it paid to out-of-state companies for management and promotions expenses. In that latter case, the same money would flow out of NC to said companies if we had a lottery.

The real "revenue loss" to NC from not having a lottery remains a small fraction of the stated amount. In fact, it would cost more on an annual basis to set up and run a North Carolina lottery than it would "save" in out-flows to neighboring states. There may be reasons to set up a lottery in NC, but this is definitely not one of them. You don't spend a dollar to save less than a dollar.

The sad thing is that if you are poor in this country, 135 Million to 1 may be the best chance you've got. :(

MC

do you know why jacobs in spirit supports a referendum on the lottery but not school merger???

before you get into legalities...... it is not clear that commissioners can not put straw hat referenda on the ballot... other attorneys have different "OPINIONS" than the SINGLE one the county asked.

I can't understand what in the hell merger has to do with the lottery.

If you don't have anything to add on this topic, do not post on this thread! Is that so hard to understand?

I gave you your own playground http://orangepolitics.org/elections/orange_county_school_board_race.html , you need to stay there until you grow up enough to discuss issues with the big kids. It start with using your name or at least a valid e-mail address.

Barry Jacobs has proposed a public referendum on gambling. He supports horse racing but not a lottery. Ellie Kinaird agrees.

http://www.heraldsun.com/orange/10-496474.html

Mark M. thank you for your comment. That's a very good argument against a lottery, IMO.

While I agree that most people that play the lottery can little afford to do so, they still do so and will take the time and money to drive to either Virginia or South Carolina. Why not keep the millions going out of state within the economy of North Carolina? It may not be the best thing, but it is better than watching the money flow out to neighboring states.

"Since Tuesday, Virginia lottery officials estimate North Carolinians have handed over a million dollars to Virginia buying lottery tickets. They say North Carolinians spend about $100 million a year playing Virginia's lotteries.

South Carolina has received $120 million from North Carolina since the state's lottery started two years ago." ...wral.com

How lottery money is set up to benefit the school systems is established within the state. If I remember correctly, MI (a lottery state) still has to put enough money in the education budget to be able to operate without lottery money being taken into consideration.

Barry,

First, about ABC I said that "Prohibition proved that some vices can't be forbidden." I don't think gambling will go away if the state of NC doesn't start a lottery, but that doesn't mean that the "state" should be sponsoring something that disportionately impacts those citizens who can least afford it. I have no objection to the state taxing those vices though or the degree of regulation imposed through alcohol control boards.

Again, I think some paternalistic acts, such as seat belts, have positive benefits for people other than the person being required to wear the seat belt. There are plenty of examples of government "paternalism" around safety other than seat belts. Child abuse, speed limits, zoning, environmental protection, and of course, Mark K's favorite, mandatory education. I'm not sure where (or if) you draw a line between paternalism and regulation, but most laws that regulate behavior can be described as paternalistic by some and protective by others.

Terri,

My bad. I wasn't seriously proposing penalties for gambling. I don't believe there should be any. I was trying (poorly, obviously) to make the point that the State sticks it's nose into far too many things, already, that are none of it's business.

If I were in an automobile accident (that wasn't my fault) and the other driver died because he wasnn't wearing a seat belt, I'm pretty surre I'd feel no guilt at all. I'd be sorry somebody died, but no guilt. If the accident was my fault and the other guy died, whether he was wearing a seat belt or not, I expect I'd feel plenty guilty. How any of that relates to balancing rights, based on "the greater good" escapes me.

I think EVERY law (or ANY governmental action or inaction) that depends entirely on a paternalistic excuse for it's existence (and on no other rationale) is bad, bad, bad. Apparently you believe otherwise. OK. And if you can cite me a law, paternalistic & nothing else, which we can somewho agree is a good law, I'll buy you lunch or contribute the price to your favorite charity.

Barry

P.S. In the interest of full disclosure, I can't imagine how it could matter much less to me, one way or the other, whether NC adopts a lottery. It's all this "we have to protect them from themselves" that's making me crazy.

To be complete, shouldn't they also require a tax stamp for each and every illicit ticket?

Glad you feel better Barry. But I don't understand why passing legislation that applies penalties to gambling is substantively different from an outright declaration that the state does not support gambling/lotteries. Still paternalistic but not as obvious. I do agree that we shouldn't rely on gambling as a means of supporting education (or any other social service), but the outcome, forbidding gambling, is still going to be interpreted as paternalistic by some.

Philosophically, I don't endorse paternalism, but I'm not convinced that it is always bad. If I hit another car and the driver or passenger dies because he/she wasn't wearing a seat belt, I pay the penalty with guilt for the rest of my life. So to my way of thinking laws requiring seat belts, motorcycle helmets, restricted access to alcohol, etc. are protecting me as much as they are creating barriers for others. We live in an interconnected world; what's instrusive for some is protective for others. How we balance those rights is a governmental junction that *should* be based on the 'greater good.'

If people want to spend their money to help lower my taxes, I'd certainly let them. I mean, if I guy walked up to me and offered me $100 of his own money no-strings-attached, then I'd be inclined to take it. If he doesn't want it, I sure could use it. Unfortunately, people aren't always smart enough to do the right thing, and as nice as it would be to help them, they are ultimately responsible for their own welfare.

I also agree with Barry, I don't like the paternalistic attitude of thinking we know better than some others how they should spend their money. But I don't like a lottery because it winds up doing just what Ruby said--states wind up diverting the money from its intended use. I think if a service is for the public good, then it should be a priority in the public's budget. I don't like associating the funding for public education with revenue from a voluntary "tax" so to speak---I think it sends the wrong message about how we value education.

My main reason for opposing lotteries is that they divorce citizens from government expenditures. With direct taxation, citizens feel the effects of expenditures and thus are sometimes compelled to participate in the process that determines those expenditures. With a lottery, the citizens are quite removed from the process and, of course, this is just what the corporate minions who run the show want.

I think we should have a lottery to choose legislators. I'm totally serious.

Mark

Terri,

Whatever the purpose of government is, I think it should NOT be the forbidding of "vices." Your response to the ABC-store argument was "some vices simply can't be forbidden." But by not having a lottery are we forbidding the vice of gambling? Or merely causing a further waste of gas and the fattening of the coffers of our neighbors? And, no, I don't call myself a Libertarian. Although there is much in that philosophy that is dead-on, I've never been comforable in that company: I"ve never met a poor Libertarian and every one of them I have met shared the same "screw you, I've got mine" philosophy (with profound apologies to Libertarians out there - if any - who don't fit that description). If I have to have a label, I'll settle for the one the Chapel Hill Weekly hung on me thirty-plus years ago in an interview with a young, arrogant, loud-mouthed criminal defense attorney who Jim Shumaker labelled a "wild-eyed moderate."

And for those of you who still believe we have any obigation to protect all those ticket-buyers from themselves (and as a perfect solution to Patrick McDonough's dilemma) there could be almost instant and total relief: the General Assembly can pass, tomorrow, a law making it a Class H Felony to possess "Gambling Paraphenalia" The defenitions would include, of course, lottery tickets (since you certainly can't collect your winnings without the physical ticket).

A sub-part of that law would make it a Class I Felony to Transport any Gambling Paraphenalia on the public roads of North Carolina (jsut like our current drug laws) and suject any vehicle used for such a purpose to immediate confiscation and sale (just like our current DWI laws). The next sub-part would make it a Class I Felony to Maintain a Dwelling (just like our current drug laws) for the purpose of possessing any Gambling Paraphenalia and anyone convicted would immediately forfeit the dwelling in which the paraphenalia was found.

And, just to make sure everyone got the point, the last sub-part would declare as contraband any proceeds realized as the direct result of Possession of Gambling Paraphenalia and those proceeds would be immediately forfeit, to be divided equally between the State, local law-enforcement, and a new federal agency established for this purpose: Gambling Organization Neutralization & Interdiction Federal Forces (GONIFFs). THAT'LL PROTECT 'EM!

I don't think it's seemly for the State to be in the gambling business. But neither do I think it's seemly for the State to be in the business of telling people what they can't smoke (while refusing to consider a reasonable tax on tobacco), what clothing they have to wear to ride a motorcycle, or that they can't accept cash for having sex.

Sorry if I put anybody to sleep but it felt REALLY good to get that out of my system.

Barry

According to today's News & Observer, the Lumbee's may be thinking of opening a casino off I-95 if they are granted tribal status. "Tribal casinos are alternately condemned as the most modern way for non-Indians to steal Native Americans blind and touted as the last great hope for economic salvation for a people in dire need."

http://www.news-observer.com/front/story/3591323p-3192695c.html

This is almost as distressing as the lottery issue. Isn't there some non-addictive service that can generate revenue? Why is our culture so drawn to gambling--especially in the face of the fact that few, if any, ever really get rich quick?

Barry, What purpose does the government serve to your way of thinking? Would you call yourself a libertarian?

I oppose the lottery. I think that our taxes should pay for public education. I do not think Florida's, South Carolina's, or Virginia's schools are any better than ours. It is part and parcel of our civic duty to make sure that we fund schools much better than we fund prisons. We should not rely on it to do so. That is what is troubling in America today, we want to sacrifice the wrong values, compassion, responsiblity, and long term thinking, for a short term solution, the lottery. If we can pay 87 billion dollars to rebuild IRAQ, what are we willing to pay to provide a top quality education for all of Orange County's young people.

As someone who grew up in a lottery state (MA), I can tell you that most of the people playing a lot (daily!) can't afford to do so. It's sad watching people fork over money, get nothing for it, only to do it again.

The part about the lottery that troubles me most is that is based on the idea that we can get something for nothing. First, that is the promise to the lottery players- that you can get something tremendous with little investment. Of course, this is a very unlikely promise, but one made nonetheless. Education and disciplined saving and spending practices have delivered far more Americans to increased wealth.

Second, and perhaps more disturbingly, the implicit message in advocacy for an education lottery is that we should not be willing to pay for our own children's educations; instead, we should prey upon the unlikely hopes and dreams of others to take their money to pay for our children's educations. In short- you can improve your child's education, but Iyou don't have to lift a finger to do it.

Of course, once an education lottery is set up, it becomes an excuse to lower support for education funds through more traditional means such as property taxes, etc.

The real dilemma here is whether or not NC should continue to lose the millions that go to SC, VA, and TN over the border with so many citizens playing anyway. Saying no to a lottery is equivalent to disarmament in this battle for tax receipts. The question ultimately becomes- do the many other NC residents who do not play because of the inconvenience of doing so use their money in a way that is more supportive of the economy and education in NC, or not?

Can we get a couple of economists on this?

I share some of Barry WInston's sentiments about the patronizing nature of telling people how to spend their own money. I also share the concern that a lottery is a "tax" on the vulnerable.

For me, the final resolution comes from asking if running a gambling operation is a necessary function of our state government given its many other important responsibilities. I see no compelling argument for NC to get into the gambling (aka gaming) business.

Don't know if that is a Libertarian argument, a conservative argument, or a liberal argument.

Terri,

The government doesn't even PRETEND to protect all citizens. It cannot protect all citizens. It especially cannot protect all citizens from themselves. Not only should we not enforce seat-belt laws, there shouldn't be a seat belt law. There shouldn't be a motorcycle helmet law. There shouldn't be a law criminalizing the possession of a weed which grows naturally in the ditches of Kansas.

Everyone of those laws owes it's continued existence to keeping someone in government employed in it's enforcement and for no other justifiable reason. Please excuse the rant, but the government is NOT here to help you (or me) and - you're right - the only excuses I've ever heard for not having a lottery all boil down to the same patronizing thing: We know better than you do what's good for you and what's not.

Barry

Do the math; the lottery is stupid! Each year, to reach Gov. Easley's revenue goal of

$450 million, at 45 cents on the wagered dollar, North Carolinians would have to bet

about $1 billion. Our population is about 8 million, so if every citizen, from newborn to

almost-dead, played the lottery, each would have to wager around $125.

Back out the youth, the people who object on religious or moral grounds, and those like

me who feel that a lottery is waste of money. This might leave about 2 million people

who must wager $500 each per year to achieve the governor's goal.

The lottery will not increase our salaries. Therefore, money wagered is money taken

from our merchants who sell us groceries, cars and movies. I would rather support them,

who provide us known goods and services.

Finally, the lottery is extremely inefficient. If we want to develop a new tax on the

poor, we can be much more efficient than 45 cents on the dollar.

State Reps. Paul Luebke and Joe Hackney are right on when they say we should figure

how much money we need to support our schools and then establish a reasonable tax

system to collect the money.

I would add to Cam's point that the marketing costs for lotteries are quite high. Based on my knowledge of lotteries throughout the country, once prizes, administration, and marketing costs are taken into consideration, the amount that goes to education, libraries, etc. is no more than one-half the amount of money spent on the lottery tickets.

From the state's perspective, raising taxes would not only be more honest, but also more productive for raising revenue.

From a player's perspective, Vegas or Atlantic City offer better returns!!

It's hard to talk about the lotto being illegal, when we have video poker in NC which is also a total scam. With video poker, the schools get nothing!

State Senator Fern Shubert is strongly for outlawing video poker, and keeping the lotto illegal. She is a great candidate to replace tax hike Mike.

I am against a lottery as they exist in other states because of the way ticket purchasers hold up the lines in convenience stores. Ever been to Florida or Virginia and tried to purchase something at stor ethat sells tickets? It takes twice as long.

Not the usual high minded thinking that folks expect from me but that's how I feel.......

BTW the administration costs are way too high, far too little revenue goes to education.

Good point Fred, but I think Prohibition proved that some vices simply can't be forbidden. Don't forget cigarettes in this list of vices the state chooses to profit from. We tax those, pay subsidies to tobacco growers, and then turn around and have to pay a lot of the medical expenses for those who are hurt by the product. Doesn't make much sense does it? That's why I think we should learn from past mistakes and never let the state enter the gambling business.

Terri, I understand your point, but at this juncture, it is much like trying to put the tooth paste back in the tude.

As for "we should learn from past mistakes and never let the state enter the gambling business," last weekend as we drove back from Atlanta, we stopped for gas in SC (can you imagine being thrilled by only paying $1.73 per gallon?) and the place was full of cars with NC plates with people buying Lotto tickets; the payout was something like $200 plus million. The state is in the gambling business and the people of NC will travel across the northern or southern borders to spend their money on tickets that benefit VA or SC.

I like to spend my money in Orange County so I try to avoid the New Hope Commons Mall when I can. Sort of the same principle for many folks, it appears.

How about the state's ABC stores, where do they fit in? Booze is legal, the state sells it, some abuse it with tremendous personal consequences, and there are costs to society, but the state forces no one to buy the product.

How about the state's ABC stores, where do they fit in? Booze is legal, the state sells it, some abuse it with tremendous personal consequences, there are costs to society, but the state forces no one to buy the product.

As your "favorite right wingnut blogger", I am torn on this issue. I see both sides, and do not know how I would vote today.

This is VERY rare for me to be torn on an issue. I see the world in black and white.

http://www.hippyhillnews.com/hhn/2004/02/i_am_torn_on_on.html

Gambling is an addiction for many. Barry, I don't know if you support legalizing all trade in narcotics, but there is a (slight) connection in the regulation of the two. Stand at the counter of a big-city scratch-off vendor for awhile, say on a pay day, and you might feel less good about lotteries. That is a depressing sight.

Barry, I've struggled with that issue. I agree it's paternalistic (or maternalistic in my case). But is it ethical for the government to promote activities that they know negatively impact the most vulnerable portions of society, those who desperately hope for any option to improve their living situation? The data show us that this is a situation in which the rich(er) benefit at the expense of poor. Should we enforce laws requiring people to use seat belts? We had a similar discussion around the payday lending organizations. Same dilemma. Is government here to make sure ALL citizens are protected or is the primary function revenue generation?

Terri

Perhaps this makes me a libertarian in some people's political taxonomy, but I'm very much opposed to the government getting into the gambling business. I would have less of a problem with changing laws to allow for-profit gambling and taxing the hell out of that. At least in that way, we wouldn't be subjected to this thinly disguised charade of the socially beneficial lottery.

I find it difficult to accept the use of the words "tax" and "penalty" applied to 100% voluntary spending.

Or, because we're wiser or older or richer or something, does that mean that, in this special case, we get to tell other people how to spend their money?

Barry

Terri, I oppose it for the same reason - it's a regressive penalty against those who can least afford it. In states where lotteries have been established supposedly to support education (or other non-controversial government services), they have found that the lotttery funds were instead used to displace education funding which left schools in the same sorry state and effectively used lottery money for other items in the state budget.

If we really want to support education, then let's pay for it openly with our taxes. I think it's especially weird for the government to be running this gambling business. I have seen state-paid-for ads in other states encouraging people to spend their hard-earned money on lottery tickets; that just makes my skin crawl.

Here are some good articles on the lottery:

http://www.common-sense.org/?fnoc=/common_sense_says/99_april

http://www.common-sense.org/?fnoc=/common_sense_says/01_january

In state after state, educational spending is being cut as a result of lotteries. Besides that it is regressive and gambling is just another form of addiction. There's really nothing positive to be gained by a state lottery. Please please please--speak out on this issue.

Here's the 411 on Rep. Hackney:

http://www.joehackney.com/

Contact Information

Electronic Mail:

joeh@ncleg.net
joeh@bellsouth.net

Postal Service:

Representative Joe Hackney

2207 State Legislative Building
Raleigh, NC 27601-1096

Representative Joe Hackney
P.O. Box 1329
Chapel Hill, NC 27514

Representative Joe Hackney
632 Harold Hackney Road
Siler City, NC 27344

Telephone:
(919) 733-5752 (State Legislative Building)
(919) 929-0323 (Epting & Hackney, Attorneys at Law)

Facsimile:
(919) 828-6257 (State Legislative Building)
(919) 929-3960 (Epting & Hackney, Attorneys at Law)

¡Se habla español!

Para hacer preguntas en español, mandeme una carta electrónica a joe@ncleg.net.

Hackney's a member of the House. Ellie Kinnaird is Orange County's lone senator.

Thanks Ray, I hit the button too quick on that - still getting used to the new style of posting. Ruby's pointed out that you can create a personal diary using the new software and then edit it accordingly. I might shift to that so I can correct my dashed off postings.

The lottery is a terrible idea and, as Terri has pointed out several times, never seems to fulfill on its promise of "easy riches".

Compounding their bad idea, our NC lawmakers pick the most expensive type of lottery to operate, the one with the lowest returns, the highest chance for fraud and theft.

I don't get how our local representatives can support another boneheaded idea that's out of sorts with their previous positions.

Terri's right, Senator Hackney need to rescind his support.

If some ambitious state legislator really wanted to put an end to lottery talks, they could propose an amendment like the bill floating around the Illinois legislature ( home of one of the nations first state lotteries BTW).

It proposes that lottery proceeds flow back to the school systems where that revenue was generated. Since the primary objection that I hear to the lottery is its regressive nature and it's detrimental effect on the poor, wouldn't sending those millions of dollars disproportionally back to those poor neighborhoods be a net benefit to the community. I'm not advocating a lottery, just thinking en blog. It seemed like a great idea to me.

The whole issue of a lottery is tough. Extra funding for schools without raising taxes has a nice ring to it. I do oppose, however, farming the lottery out to a firm that takes 2/3 of all the proceeds. If they could do it in state, creating some jobs,either gov't or private, and direct the revenues back to the neighborhoods that actually buy the most lottery tickets, you might just have a program worth something.

The senate will soon be voting on the state lottery. With the governor and the House behind this bill, the senate is the last remaining level of protection. In state after state, it's been found that actual per pupil spending for education declines within 2 years after the initiation of a state lottery. While the NC bill is designed to avoid those problems, we have no guarantee that future legislators will not undo those safeguards.

Joe Hackney, our local senator, has decided to support the lottery. If you oppose the lottery, please contact him and let him know. His email address is: Joeh@ncleg.net

http://www.ncjustice.org/alerts/details.php?id=311
http://www.ncjustice.org/media/library/307_ncpbv3n8lottery.pdf

The trick that other states use with the lottery is to say that "all the money from the lottery will go to education" so everyone thinks "hey, if education has a budget of $50 million and the lottery raises $50 million, that'll be $100 million for education". Instead, what seems to happen is that since $50 million is coming into education from the lottery, legislators decide "well, education doesn't need that $50 million we budgeted for them since they are getting $50 million from the lottery" so as a result, you see no real increase in spending on education.

anyone here have any reason to think that NC's lottery will be different?

Although Governor Easley dropped the lottery from his budget, legislators are still pursuing the
idea. The Hope Scholarship has a lot of appeal but recent reports are that middle class students are benefitting more frequently than lower income students. Nothing against middle class students, but the premise of allocating lottery funds, generated by low income citizens, is that it would benefit those most in need of educational assistance.

Additional references:
http://www.ncjustice.org/btc/lotteryFacts01.htm
http://www.advocatesfored.org/publications/Lottery%20Paper%202003.pdf
http://www.freedomworks.org/informed/issues_template.php?issue_id=59
http://www.terry.uga.edu/hope/nsf00.narrative.pdf

Going through other references, it looks like most state lotteries are spending at least 60% of their revenues on administrative costs and prizes. Furthermore, it appears that total spending on education has DECREASED in states with lotteries.

From today's NC Policy Watch (Fitzsimon File)
Just when you thought he had forgotten that the General Assembly was in session, Governor Mike Easley made an appearance this week, entering the negotiations between the House and Senate for a final budget.

Easley's priority is, what else, the lottery. He wants to make sure it passes with no advertising limits, that some of the proceeds go to his early childhood program and that he gets more appointments to the lottery commission.

Convincing the House to approve a lottery without an advertising ban will not be easy. Many House Democrats were adamant that the lottery not be aggressively advertised, others promised to vote against it if the proceeds were spent any differently.

Senator Tony Rand says that the votes are there in the Senate for the lottery. That is only true if the five Democrats abandon their opposition to putting the state in the gambling business. The lottery five all voted for the Senate budget that contained lottery provisions, as they were unwilling to buck the Senate leadership on the budget.

Voting on the lottery by itself ought to be a different matter, a chance for Senators to vote on principle instead of party loyalty.

Janet Cowell is one of my favorite new faces in the NC House.

http://www.ncpolicywatch.com/cms/?p=496
The news about the lottery is even more troubling if Rep. Jim Harrell is right. Harrell told a reporter recently that that lottery is not likely to be in the final budget agreement but the money raised by the lottery may be included.

That means the budget could pass and spend money that won't exist unless lawmakers agree on a lottery bill after the budget is approved. That would be terrible public policy but smart politics, putting tremendous pressure on lottery opponents to support the lottery legislation after they have voted for a budget that spends lottery proceeds.

It would also further isolate the five Senate Democrats who philosophically oppose the lottery, but voted for the Senate budget and would presumably support the spending levels in the final budget agreement.

It is not an accident that the lottery is the focus of all sorts of legislative tricks and parliamentary maneuvering. It is the only way that House and Senate leaders can convince the majority of lawmakers to turn state government into a giant gambling enterprise.

But get used to it. If the General Assembly makes the disastrous decision to approve a state-run lottery, then it won't just be rank and file lawmakers who will be the target of officially sanctioned deception. All the people of North Carolina will be mislead by their government. There's something for the House and Senate talking points to brag about.