Questions & Answers on a State Lottery Coming to North Carolina
Q: All the states that surround North Carolina now have the lottery and receive millions of dollars from the North Carolinians who cross the state line to gamble. Shouldn't we keep that money and put it to good use here?
A: First, even if a state has its own lottery, there will always be bigger jackpots and more enticing games introduced in neighboring states that will draw the people who seek them out. The lottery industry has become very competitive. For example, some states join in multi-state lottery games, like Powerball, in order to boost lottery jackpots, when lottery participation declines and "jackpot fatigue" sets in. Anyone within two hours of the state line who already plays the lottery in another state would go play that one if the jackpot was enticing enough. So enacting a lottery won't necessarily keep that money "in North Carolina."
Second, remember that only a small percentage of the total funds collected from a state-sponsored lottery is spent for the public good. While lottery supporters say North Carolina may lose "hundreds of millions of dollars" a year from our economy in ticket sales to other states, they are misleading the public by citing gross dollars and not net dollars. Fifty percent of the money spent on lottery tickets is returned in prizes, and only about one-third of every dollar is spent on public programs and services. Only about one third of that money would go to our state if that money stayed in North Carolina. The John Locke Foundation estimates that $81 million in real revenue loss goes to other states. North Carolina currently spends about $8.7 BILLION or 55 percent of its General Fund on education. The money being spent in other states represents less than one percent of North Carolina's education budget and an even smaller percent of the proposed $17 billion dollar state budget.
Q: Some North Carolinians are personally opposed to the lottery but believe the people have the right to vote on a state lottery in a statewide referendum. What's wrong with that?
A: The simple answer is that a state lottery referendum would be unconstitutional.
The North Carolina Constitution establishes that North Carolina holds referenda for two reasons: 1) to change the Constitution, and 2) to issue state bonds. A state lottery referendum does not fit either criteria.
It is the job of the elected members of the North Carolina General Assembly to make decisions on other issues. There are countless examples of difficult issues that have come before the General Assembly that legislators have not one time sent to voters, such as speed limits or tax increases.
Q: If we could be certain that the money from a state lottery could be "ear-marked" for education — or as some people have stated, "put in a lock-box," wouldn't that make sense to help education in North Carolina?
A: That's sounds very noble. However, that's not the way it actually works. Every dime that comes into the State Treasury goes into the General Fund and is available to be spent by state politicians. Unless a constitutional amendment is passed specifically directing all lottery money to education, the money raised can be spent on any program. And even in this case, a constitutional provision may dictate how lottery revenues are spent, but the funding education previously received through the General Fund can still be shifted elsewhere.
There is no such thing as a "protected fund" as evidenced by supposed Trust funds, ie. the tobacco settlement funds that were diverted to balance the budget in recent years.
Countless examples exist from other states where politicians have publicly declared that lottery money will go to education, then they have raided lottery money for other purposes. That hurts the education of our children.
Q: Aren't states that dedicate lottery money to education better able to fund education?
A: A Money magazine study shows that as lottery sales increase, states begin to spend less of the general fund for education. A Notre Dame University study confirmed that, "states are likely to decrease their rate of spending for education upon operating lotteries designated for that purpose." In fact, Money magazine said that states without lotteries actually spend a greater percentage of their budget on education than lottery states. Lotteries are an unreliable source of revenue for education.
Q: What's so wrong with playing a lottery? It's my money and I can do whatever I choose to do with it.
A: The problem is that the state should not be in the business of promoting gambling. With a state lottery, the state in essence becomes the bookie. A state lottery would not only make gambling legal in North Carolina but would take the extraordinary step of promoting a practice with millions of dollars in seductive advertising that has a proven record of taking advantage of the poorest and least educated of our citizens. (States are not subject to "truth in advertising" laws.) Our government should be appealing to the strengths of our citizens — instead of exploiting their weaknesses.
Q: Wouldn't it make sense to have a lottery if most of the revenues were tied to school construction?
A: School construction is paid for at the local level by the counties. A state lottery would tie the purse strings for school construction to the success or failure of a state entity to produce revenue that could at any time be diverted by the General Assembly. That would hurt the counties' ability to build schools. In Florida, a state lottery made it more difficult to pass local bond issues for school construction because voters believed the lottery is "taking care of education."
As Phil Kirk, former Chairman of the State Board of Education, has said, "I am strongly opposed to the lottery, not only for the philosophical reasons. We would never pass another local school bond and it would erode county commissioner support of extra money to the schools." Before the lottery was instituted in Florida, voters approved 21 of 22 bond issues; after the lottery, they only approved 3 of 15 bond issues and tax increases for education. In Florida, before the lottery, the state spent 60% of its total budget on education. After the lottery, Florida spent only 51% of its total budget on education. (Governing magazine, January 1998)
California's Superintendent of Public Instruction says that the lottery "has done more to hurt public education than almost anything.'' The reason? "It is not a stable revenue source,'' says Superintendent Jack O'Connell. "It fluctuates. And sometimes it isn't even new money. In tough times (legislators) say, we're not going to give schools a cost of living adjustment. Just let them use their lottery money.'' (San Francisco Chronicle, 2/5/05)
The following information was provided by Citizens United Against the Lottery
A: First, even if a state has its own lottery, there will always be bigger jackpots and more enticing games introduced in neighboring states that will draw the people who seek them out. The lottery industry has become very competitive. For example, some states join in multi-state lottery games, like Powerball, in order to boost lottery jackpots, when lottery participation declines and "jackpot fatigue" sets in. Anyone within two hours of the state line who already plays the lottery in another state would go play that one if the jackpot was enticing enough. So enacting a lottery won't necessarily keep that money "in North Carolina."
Second, remember that only a small percentage of the total funds collected from a state-sponsored lottery is spent for the public good. While lottery supporters say North Carolina may lose "hundreds of millions of dollars" a year from our economy in ticket sales to other states, they are misleading the public by citing gross dollars and not net dollars. Fifty percent of the money spent on lottery tickets is returned in prizes, and only about one-third of every dollar is spent on public programs and services. Only about one third of that money would go to our state if that money stayed in North Carolina. The John Locke Foundation estimates that $81 million in real revenue loss goes to other states. North Carolina currently spends about $8.7 BILLION or 55 percent of its General Fund on education. The money being spent in other states represents less than one percent of North Carolina's education budget and an even smaller percent of the proposed $17 billion dollar state budget.
Q: Some North Carolinians are personally opposed to the lottery but believe the people have the right to vote on a state lottery in a statewide referendum. What's wrong with that?
A: The simple answer is that a state lottery referendum would be unconstitutional.
The North Carolina Constitution establishes that North Carolina holds referenda for two reasons: 1) to change the Constitution, and 2) to issue state bonds. A state lottery referendum does not fit either criteria.
It is the job of the elected members of the North Carolina General Assembly to make decisions on other issues. There are countless examples of difficult issues that have come before the General Assembly that legislators have not one time sent to voters, such as speed limits or tax increases.
Q: If we could be certain that the money from a state lottery could be "ear-marked" for education — or as some people have stated, "put in a lock-box," wouldn't that make sense to help education in North Carolina?
A: That's sounds very noble. However, that's not the way it actually works. Every dime that comes into the State Treasury goes into the General Fund and is available to be spent by state politicians. Unless a constitutional amendment is passed specifically directing all lottery money to education, the money raised can be spent on any program. And even in this case, a constitutional provision may dictate how lottery revenues are spent, but the funding education previously received through the General Fund can still be shifted elsewhere.
There is no such thing as a "protected fund" as evidenced by supposed Trust funds, ie. the tobacco settlement funds that were diverted to balance the budget in recent years.
Countless examples exist from other states where politicians have publicly declared that lottery money will go to education, then they have raided lottery money for other purposes. That hurts the education of our children.
Q: Aren't states that dedicate lottery money to education better able to fund education?
A: A Money magazine study shows that as lottery sales increase, states begin to spend less of the general fund for education. A Notre Dame University study confirmed that, "states are likely to decrease their rate of spending for education upon operating lotteries designated for that purpose." In fact, Money magazine said that states without lotteries actually spend a greater percentage of their budget on education than lottery states. Lotteries are an unreliable source of revenue for education.
Q: What's so wrong with playing a lottery? It's my money and I can do whatever I choose to do with it.
A: The problem is that the state should not be in the business of promoting gambling. With a state lottery, the state in essence becomes the bookie. A state lottery would not only make gambling legal in North Carolina but would take the extraordinary step of promoting a practice with millions of dollars in seductive advertising that has a proven record of taking advantage of the poorest and least educated of our citizens. (States are not subject to "truth in advertising" laws.) Our government should be appealing to the strengths of our citizens — instead of exploiting their weaknesses.
Q: Wouldn't it make sense to have a lottery if most of the revenues were tied to school construction?
A: School construction is paid for at the local level by the counties. A state lottery would tie the purse strings for school construction to the success or failure of a state entity to produce revenue that could at any time be diverted by the General Assembly. That would hurt the counties' ability to build schools. In Florida, a state lottery made it more difficult to pass local bond issues for school construction because voters believed the lottery is "taking care of education."
As Phil Kirk, former Chairman of the State Board of Education, has said, "I am strongly opposed to the lottery, not only for the philosophical reasons. We would never pass another local school bond and it would erode county commissioner support of extra money to the schools." Before the lottery was instituted in Florida, voters approved 21 of 22 bond issues; after the lottery, they only approved 3 of 15 bond issues and tax increases for education. In Florida, before the lottery, the state spent 60% of its total budget on education. After the lottery, Florida spent only 51% of its total budget on education. (Governing magazine, January 1998)
California's Superintendent of Public Instruction says that the lottery "has done more to hurt public education than almost anything.'' The reason? "It is not a stable revenue source,'' says Superintendent Jack O'Connell. "It fluctuates. And sometimes it isn't even new money. In tough times (legislators) say, we're not going to give schools a cost of living adjustment. Just let them use their lottery money.'' (San Francisco Chronicle, 2/5/05)
The following information was provided by Citizens United Against the Lottery
