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Editorial: Perdue's lottery grab violates state's promise

Wednesday, March 4, 2009

(Updated 3:00 am)

Gov. Bev Perdue hit an $88 million lottery jackpot last week, and all it cost was the state's integrity.

The governor had a compelling reason to move that much money from lottery accounts to the state's general fund. Nevertheless, her action contradicts the 2005 lottery law and breaks faith with the public.

The lottery was established to raise money for public education. It's written into law. Shifting proceeds to the general fund makes them available to spend for any purpose.

Perdue ordered the transfer of $50 million from the lottery reserve fund, leaving it empty. She took an additional $38 million intended for allocation to counties for school construction.

She claims constitutional authority to override the lottery law, and she may be correct. The state constitution requires a balanced budget and charges the governor to "continually survey the collection of the revenue and ... effect the necessary economies in state expenditures" to eliminate any deficit.

With state revenues plummeting, Perdue has ordered cuts in spending to balance the ledger by the end of the current fiscal year. She still has to find money to cover necessary expenditures. The lottery is an obvious source. Despite economic hard times, it seems many North Carolinians are still willing to gamble what little they have for the slightest chance of winning a fortune. Perdue's taking advantage of their bad luck to help close the state's deficit.

In doing so, however, she's stepped into an ethical thicket. The lottery was narrowly approved -- as lieutenant governor, Perdue cast the tie-breaking vote in the Senate -- with assurances from supporters that its proceeds would benefit public education exclusively. Its very name spells it out: The North Carolina Education Lottery. It was explicitly not meant to plug holes in the budget, no matter what the circumstances. Without the only-for-education guarantee, the lottery probably would not have been approved. But now, only four years later, the promise has been cast aside.

Certainly, Perdue must meet her constitutional responsibility to balance the budget. The recession makes that a very difficult task right now. But the governor can encounter a budget shortfall any year. All it requires is for the governor and legislature to propose too much spending or project too much tax revenue. So the governor and her successors can tap lottery funds from now on to help out every time there's a pinch. If one governor can do it, others will find it easy to follow.

Leading lottery supporters aren't even protesting. They must have known all along this was bound to happen.

Maybe no one should be surprised. With the lottery, it was always the intent to game the gullible.

What do you think?

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Treadstone

March 4, 2009 - 11:15 am EST

I fear that this is a trend. Much like what happened to the Highway Trust Fund, Retired Governmental Employees' Fund and many other specifically designated funds, the North Carolina Educational Lottery Fund will fall victim to the avarice of the rulers in Raleigh. If it is repaid, it will involve a lengthy legal process as well as time and money better spent than in litigation that should never have been needed in the first instance.
The role of State government is very special; unlike the Federal government, which duties were described by a yankee wag as "...delivering the mail, protecting the borders, and staying the Hell out of my business...". The State government should see that the means of carrying on our business is facilitated with efficient roads, courts, schools, law enforcement with as little waste as possible.
From North Carolina's earliest days as a supplier of naval stores and timber to our present ranking as a leader in high technology industries such as electronics and diverse bio-technology, we have been able to keep apace with the growth of the nation. It is incumbent, however, that we realize that as State revenues fall, the practice of 'robbing Peter to pay Paul' is a shortsighted solution at best. Inasmuch as we desire new improved or widened highways, we might instead keep the ones we already have in better repair. Instead of bickering over what sort of design every new school should have, we should do what I have noticed is done in commercial business.
Have you noticed that all McDonald's Restaurants look so similar? When a new one is built it seems like they clear a lot and a truck pulls up, unloads a new unit, with the grills already hot, and the windows staffed. Such an approach for the state's schools might be practical in that the State hires an architect to design a generic school, with the layout and features most conducive to the business of teaching, and implement that design for all NC schools. It could be flexible insofar as to capacity, but otherwise, a standard design that could be easily and quickly built.
The State should make it easier for businesses to be started, with a more efficient and streamlined tax system, and fewer restrictions on the start up requirements of new companies, especially the cost of licensing and permits.
North Carolina is a wonderful state; in order to keep it that way we need to maintain a level headed approach and avoid making panic driven grabs at any sort of possible revenue without regard to the unforeseen consequences.

Illiterati

March 4, 2009 - 11:34 am EST

Treadstone, I'm intrigued by your idea for standardized school construction. Franchises have been doing it this way for years because it makes the most economic sense. Rockingham County is devising plans to spend money it doesn't have to design and build new schools. If the county insists on pursuing these plans, it would be great if the taxpayers could avoid spending all that money on the front end that goes to architects and their ilk.

tonymo

March 4, 2009 - 11:42 am EST

Okay, your first mistake was in using hte terms "integrity" and a NC Demo-Rat governor in the same sentence. Your second mistake was in believing that she might give a rat's rear end!