The Governor’s Lottery Scheme – Bottom of the Barrel?

Is California’s lottery becoming just one more subsidy for the rich?
When We, the People of California agreed to have a state lottery it was to pay for extra education for our children on top of the existing education budget. It was not supposed to make up for other budget cuts for schools, it was supposed to be extra money to improve the educational system.
This has … migrated. The lottery under the Governor’s new borrowing plan may be fast becoming one more gimmick to avoid taxing the rich and big corporations. (Not to mention paying out millions upon millions in debt interest for years and years to those with the means to loan the state these billions.)
The California Budget Project has a new report, Borrowing Against the Future: Are Lottery Bonds the Best Way To Close the Budget Gap? (PDF file) It is well worth taking a look at. They say the numbers don’t add up, the lottery can’t deliver the needed revenue, the scheme makes it even harder to fix the budget in the future, will have a high interest rate, and has numerous other problems. On a conference call Tuesday with jean Ross, one of the report’s authors, I also learned that the cost over time of borrowing this money will be between $41.5 and $50 billion — way too high. The lottery is largely played by low-income people so efforts to drive up lottery purchases increases their burden and will likely come at a cost of other purchases, thereby sacrificing sales tax revenue to the state.
That there are so many things wrong with this latest borrowing scheme might be a good sign. It might, just might mean that the Republicans are scraping the very bottom of their barrel of anti-government and tax-avoidance gimmicks. After this wild scheme collapses maybe, just maybe they’ll come to their senses.