Leader Blues

Tuesday, November 10, 2009

EDITORIAL >> Don’t call it philanthropy

Every few days the Arkansas Lottery makes another breathless announcement about how many people are betting. From late Saturday night, when the first Powerball tickets were sold, through Wednesday — that’s only four days — Arkansas people invested $1.1 million in jackpot tickets.

The lottery office reported the development with the same exhilaration that it has announced the magnitude of lottery purchases regularly since the lottery began two months ago. It is a sign of marvelous things for the state, or that is the message.

But should we celebrate? Remember, half of the Power-ball sales — something over $500,000 for those four days — leaves the state instantly for the multistate jackpot treasury. That is $500,000 that will not be spent in the Arkansas economy. In the context of the current environment, that is the equivalent of losing a small plant and 20 jobs every four days. Sure, some day, maybe right away, an Arkansan will win the big jackpot and some of that money will trickle back.

Perhaps a tenth of the bets will stay in Arkansas for small prizes. Some of it will pay the big lottery staff and Ernie Passailaigue’s $325,000 salary.

And, as Lt. Gov. Bill Halter will tell you, endlessly, part of the $1.1 million will stay around to give a few youngsters scholarships in 2011 and beyond.

But not needy youngsters as Halter and the lottery promoters proclaim. Arkansas already appropriates money from your sales and income taxes to provide tuition to youngsters from poor and middle-class families who meet the low eligibility requirements — basically a solid C average in high school.

The state carried forward a huge surplus from last year because the appropriation was more than enough to meet the demand.

The lottery amendment that voters ratified last year prohibits the state from ever reducing the taxpayer-financed scholarships.

So to spend all the new money earmarked for scholarships by the lottery, the legislature had to expand the scholarship program. It took off the income limits so that from now on the children of billionaires qualify for the same scholarships to public or private universities. Then it lowered the eligibility standard so that any aimless youngster who decides to try college for a year can get the money.

A college scholarship is now an entitlement. If the lottery and the earmarked share of state taxes still produce more money than the kids need in 2011, the state can raise the scholarships to include some walking-around money. The Constitution now says neither lottery proceeds nor the earmarked tax receipts can ever be spent for anything else.

Perhaps a college entitlement is a good thing, but only if the government is meeting all the other manifold needs of a poor state, like good schools, public health, prisons and law enforcement.

The chief effect of the lottery, other than draining money from the productive economy, is a big transfer of wealth — upwards, from the poor to the well to do.

So, enjoy the thrill of betting on an $80 million jackpot when you buy a Powerball ticket, but don’t feel noble. It is entertainment, not philanthropy.

Ernie Dumas writes editorials for The Leader.