Here in Tennessee this Tuesday, we’ll be voting on a referendum to make a change to the TN constitution in order to allow the state to sponsor a lottery, modeled after the state lottery of Georgia. The basic idea of the lottery is that the proceeds would go to fund in-state college tuition for students who maintain a ‘B’ average in high school. Anything left over would go to K-12 education, and the remaining amount to other programs.
It’s a highly controversial around here, with current polls showing about 55% or so in favor of the proposal. In order to pass, if I understand it, the proposal has to get a number ‘Yes’ votes equal to 51% of the number of votes cast in the gubenatorial election. Something like that.
The arguments for the lottery include:
This will allow many more TN kids to acheive a college education
This will recapture all the $$ that currently goes out of state to the KY and GA lotteries
It’s a personal choice issue - if you don’t like the lottery, you don’t have to play
And against:
The scholarships are not need-based, so a lot of the money will go to families who would otherwise be able to afford college anyway
Lower income residents spend a much larger percentage of their income on lotteries (those who can least afford it)
There will never be money left over for K-12, and TN already has one of the worst school systems in the country
The estimated $600M spent annually on lottery tickets would otherwise contribute to the stagnant TN economy
Also, this $600M is not taxed. Since a huge percentage of the state budget is based on our hefty sales tax (thanks to the lack of guts in the legislature to pass an income tax), that’s a big sap of state income.
And of course there are the moral issues that many of the churches (this being the Bible belt) are hitting hard.
My thread title aside, I think a lottery would be a terribly stupid move for the voters of TN. Can anyone come up with a good argument in favor of it?
(It will probably involve attacking some of my facts above, so I’m off to check my cites…)
I live in Memphis but am from Florida where the lottery is huge - I received a full scholarship to Univ of Florida from lottery money. I am for it.
But A pastor at a huge Baptist church here im Memphis rallied the troops and told everyone to vote no today. My wife (Baptist) is voting no, but I’m Catholic so I’m not constrained by his sermon - I’ll be voting yes even though I’ll never buy a lottery ticket.
I’m voting yes for 2 reasons - 1) like you said, there’s a lot of money leaving the state going into KY and GA lotteries; 2) the extra money might help ward off that income tax.
As Neal Boortz says (Atlanta-based talk show host) - Lottery is a tax on the stupid. If you don’t believe me try your 6 numbers here: http://www.cadenhead.org/projects/misc/lottorobics.shtml let it run for a few weeks and see if your numbers are chosen.
How would the lottery help delay any income tax? If all the income is earmarked for new scholarship programs, it won’t do anything to relieve the budget crunch.
And, with regards to the money going to KY and GA – Why is that bad? Because it’s not going to TN businesses? We don’t get tax revenue from it? Both those would still be true if the money was spent on our own lottery, but much more money would be involved. I think this would make the need for an income tax more likely, not less, since it eats into tax revenues.
Finally, I understand your perspective on the scholarship program. If it hadn’t been for the lottery, would you have been able to go to college at all? What were your plans for college before the FL lottery was in place?
What bugs me is people who say they’ll vote for it “because I might win!” Yeah, and monkeys might fly out my butt.
Pro: To the extent possible, governments should allow people their “pursuit of happiness”. A lot of people play the lottery and enjoy doing it without adverse consequences.
Con: Those that are earmarked to get the money will soon depend upon it and likely wish to expand the program even more. At some point the expectation of ever increasing revenue, which will be built into the budgets will be greater than the reality, so something will have to give.
It would, but indirectly. Money from the lotto helps schools, which means the legislature can get by without it.
I don’t like income taxes. I find sales taxes to be eminently fair. In Tennessee, I note that the bloody TennCare keeps eating up the public funds, and I oppose the income tax mostly because I know the legislature would use it to screw over everyone unequally, rather than equally.
Not exactly. The money stays in Tennessee, and thats the key. Even if it gets sent into the lottery, it will be moved back out and will be used to buy advertising, salaries, offices, and so forth. That does get around and will improve the speed at which money moves through the economy.
Something worth considering is the possibility of your state taking the money and running with it rather than doing what they said they would do.
I don’t know all the details, so I wouldn’t take my word for it, but perhaps someone who knows more can come in and tell the tale of the Virginia Lottery.
If I recall correctly, the Virginia Lottery was sold to Virginians in 1988 as an education-only revenue generator. That did not prove to be the case. From this site, I find the following statement:
Which looks to me to be a spin-ful way of saying, “nearly three-quarters of the money was siphoned away from education to fund other projects.” I don’t have any idea how the thing was sold to us as education-only in 1988 but only specifically dedicated to that goal eleven years later.
smiling bandit, I’ll agree to your second point, that the money is being kept in Tennessee and not going out of state. But it still isn’t being taxed. Maybe they should apply the sales tax to lotto tickets; that would make more sense. At least it would be generating revenue.
I disagree with you about your assertion that the money would go to help the schools. First, it has to go toward college scholarships for all eligible students (which isn’t in the state budget right now; it would be a new program). Then, any left over funds would go to K-12 schools. Nothing that I have read indicates that anyone believes there will be money left over.
Sofa King, I think you raise a valid concern. However, I think the proposed constitutional amendment would preclude the possibility of the money going into the general state budget. Which happens to be where more money is needed, and why I think we need a progressive income tax.
What’s wrong with college education? I’m at UT. They never give us any cash at all. At least its sending money to some school. Moreover, all the new amendment says is that they $$ must go to education.
Nothing is wrong with a college education; quite the contrary. My problem with the proposal is that the scholarships are not based on need: anyone with a B average or better gets a scholarship to an in-state school. So we’re taking most of the money from lower-income residents (who play the lottery more) and giving it to mostly middle-class students, many if not most of whom could already afford college anyway.
To say the money all goes to education is misleading. It goes to these scholarships first, and to K-12 second (if at all). K-12 is where the money is needed.
A state lottery will place additional resources in the hands of politicians. Need any other argument be advanced against it?
If the money is spent on college scholarships, colleges will quickly figure out that they can raise their tuition to compensate. When the government subsidizes an activity, the price rises. This is why college education is already so absurdly expensive.
Why not simply income raise taxes outright, then offer fabulous prizes to one or two people with some of the proceeds? Or even allow people to increase their odds by overpaying a certain set amount on their taxes so that the overpayment would be “voluntary.”
I don’t live in TN anymore, but I did go to school there and worked in state g’vt for a time. One of the arguments, at least when I was there, that was put forward for granting the scholarships on merit only was that it would retain the smartest people in the state. The theory was that the smartest kids will go out of state to go to private schools etc, but if they can get a free education in TN, they will stay. Having kept them in state for college, TN employers would have a better pool to draw from, and in the long run the state would prosper.
Apparently UGA is now very difficult to get into, even applying in state, because of the “Hope” scholarship that retains many of the brightest students who might have gone out of state before.
I think the lottery is a great way to collect voluntary contributions to the state coffers, but it is not going to fix TN’s fiscal problems.
It will be interesting to see what they do next year, will they spend the tobacco money to balance the budget again? As I see it the only real alternatives are to cut state services, or raise revenues. Since the sales tax can’t get too much higher, it looks like an income tax is the only way to do that. The political weasels will have to make some hard decisions in the spring, that is for sure.
I am always sort of amazed that lotteries are voted for. On the one hand it is pretty clear that the people that spend the most on lotteries are the people that can least afford it. So you would think that the liberals would not be pushing a tax on the poor. On the other hand I would think that libertarian conservatives would not like it because it seems to be such a clear case of something that the government is not really chartered to do. The moral conservatives because it is gambling. Probably they are voted for because the people that vote for them know it is a tax they won’t have to pay for.
If all it takes is a ‘B’ average to get a scholarship and nothing else - look for an explosion in high school grades. It would happen because of the pressures and because you can. Grades aren’t objective and they’re not standardized. I’d be very surprised if any money was left after the ‘B’ average scholarships were handed out. Sounds like a strange way to allocate lottery proceeds. Why not just send the lottery proceeds to a general education fund?
—On the other hand I would think that libertarian conservatives would not like it because it seems to be such a clear case of something that the government is not really chartered to do.—
More importantly: if it’s okay for the government to hold a lottery, why not anyone? What sort of ridiculous logic justifies barring private companies from holding lottos when the government is allow to do so?
Lotteries are generally described as a “tax upon the stupid”. That being said, I have no problem with them, except that a lot of the proceeds are usually misappropriated. Here ain MA, the lottery was founded as a way to fund local government (schools, fire services, police, etc.). However, the legislature actually steals the money to pay the state’s own bills. In addition, state lottery commisions become dumping grounds for political hacks, cronies, and thieves. The fact is, richer communities benefit far more (from the lottery) than poor towns (who contribute the bulk of the contributions), which is another way of saying that the poor are screwed by it.
I think there should be a nationa lottery (with a 1 billion $ prize)-this would be used to eliminate the national debt!
Not having gone back to check your previous post to GD I was wondering if you take a similar sort of view when private business sells dubious things to a public that is illequipped to understand what they are buying.
previously stated by Apos:
Especally when the state is so clearly ripping the lottery customer off when compared to similar enterprises run by private concerns. When I would drive into Reno from the bay area to go skiing there were all sorts of billboards proclaiming that this or that casino’s slots paid back at 97% or so. What do state lotteries pay back at around 50%.
State says that all lottery money will go to fund education.
State gets $5 billion from the lottery.
State lowers education budget by $4 billion so a net rise of $1 billion is seen in education.
When called on it, the state says that all $5 billion of lottery is indeed going to education.
This is an argument of ‘marking money vs the water theory of money’. The state says that the $5 billion was marked and is spent on education. They are correct. However, the ‘water level’ of the money spent on education only rose up $1 billion so a case could be made that only $1 billion of the lottery money was spent on education.
Now, one of the arguments above is pure BS and the other right but they still say it with a straight face and people still swallow.
