Lottery is not funding solution for state

Published 12:00 am Wednesday, January 28, 2004

Alabama legislators, as a group always loathe to address their responsibilities head-on, are looking for a way to delay having to make the tough decisions caused by predicted huge shortfalls in the state’s education and General Fund budgets.

Some of the lawmakers think they’ve found it. A lottery.

“In every meeting I’ve had, they bring up the lottery. I have stated to them that I did expect it to come up and I felt the people should have the right to vote on this issue,” Senate President Pro Tem Lowell Barron, D-Fyffe, said.

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If you’re thinking that this idea has already been rejected by the voters, you’re right. It was, in 1999. But some legislators believe it should be dusted off and tried again in light of the state’s serious financial troubles.

It is true that Alabama is surrounded by states with lotteries or some other form of state-regulated gambling. It is already true that Alabama already allows betting on dog racing and electronic gaming devices, so the state is not exactly pure on this issue. And it is true that a lottery has one thing going for it from a public policy standpoint — it probably generates for the state the greatest percentage of money bet of any form of legalized gambling.

But as public policy, a lottery has several down sides. There is the problem of addiction, and there is also the regressivity of a lottery — the fact that it extracts money largely from those least able to pay it. In other words, it is a tax on the poor. (It also has been described as a tax on the mathematically illiterate who don’t understand the huge odds of ever winning).

When it comes to addressing the state’s current budget crisis, there is another major problem with a lottery. It requires a vote of the people to amend the constitution, so it would be months before a referendum could be scheduled and held and the state’s leaders know if the revenue it would generate would be available to balance the state budgets.

We have to wonder if some of those supporting a lottery merely want to be able to delay having to decide whether to raise revenue or cut services and jobs. And if the referendum failed, as it did before, legislators could blame the state’s funding problems on the public.

But perhaps the greatest problem of a state lottery is the false perception of many people that it would solve the state’s funding crisis.

We’ve heard it again and again from members of the public every time a new tax measure is discussed: “Why not just adopt a lottery?”

The answer: A lottery simply will not generate enough revenue to solve Alabama’s funding problems. But so many people think it would that it might make it impossible to get support to generate the real revenue needed.

When a lottery was discussed five years ago, supporters said it would generate about $150 million a year. The reality could be half that much. But Alabama faces a $500 million shortfall in its education and General Fund budgets, and that’s just to stay level with current services. The state’s public schools would still be some of the worst funded in the nation.

Public officials in other states — Florida and California come to mind — have said that their lotteries turned out to be awful for education in the long run. The public saw lotteries as a way to solve education funding problems, and once they were in place support for other revenues for schools evaporated.

And if Alabama adopted a lottery, it almost certainly would see the same spending pattern that other states have seen — a year or two of high revenues while it is new and interesting, and then flat revenues or even declines when it becomes old hat. That is hardly a formula for solving Alabama’s funding issues long-term.

If a lottery is again put before the people of Alabama for a vote, it should be part of an overall revenue package. A lottery alone might help in the short term, but it probably would be a disaster over the long haul.