Friday, February 12, 2010

EDITORIAL >> Lottery takes from the poor

The Pine Bluff Commercial polled 12 merchants in the town last week about their sales the past few months and reached a startling conclusion. Just like you were taught in elementary arithmetic, if you have a fixed amount of money and you spend part of it on a new commodity, you will have less to spend on other things.

That would not be news had not lottery promoters prescribed a new corollary: Simple mathematical principles do not apply where lotteries are involved. Lotteries are good for everybody.

The newspaper asked the merchants, nine of whom sold lottery tickets, if the lottery had affected their business — their non-lottery business in the cases of those who had a franchise to sell tickets. They all said it had. The sale of non-lottery goods and services went down when the lottery started in September. Business slumped even for laundries and dry cleaners.

It is a feature of lotteries everywhere that while a large cross-section of people play the lottery, those who play with great regularity and in volume are the poor and minorities, two cohorts of people who tend to be the same. They don’t have any discretionary income so if they spend $20 on lottery tickets one week that is $20 they will not be spending on food, clothing, medicine and the non-essentials of the good life. And the state and local governments will not be collecting sales taxes on the transactions.

Last month, Gov. Beebe wondered how much the lottery had affected state tax collections. Owing to declining tax collections, the state had made the second big cut in budgeting for state services and aid to local governments in this fiscal year. Ernie Passailaigue, the lottery director, repeated the mantra from the lottery campaign in 2008. The lottery would not be a drag but an economic boon for the state and local communities. You see, people with a gambling zeal would not be going to nearby states to buy lottery tickets, people would be winning big prizes and paying income taxes on them and the lottery itself would employ lots of people with hefty salaries. The last prediction turned out to be true.

Jefferson County and its merchants tell the true story. While many people, including the rich and well educated, buy lottery tickets from time to time, the poor and the desperate pursue the get-rich dream relentlessly. Jefferson County is the poorest of all the populated counties in Arkansas. It has one of the highest unemployment rates in the state. More than a fourth of its residents live in poverty, and 55 percent of the residents are African American or Latino. Nine Arkansas counties have greater populations than Jefferson County but only one — Pulaski County, which has five times the population — rakes in more money for the lottery. Lottery sales in Jefferson County totaled nearly $7 million in the last quarter of 2009. The loss of $7 million of wealth from a poor county every three months cannot be a healthy development, but it is if you listen to the lottery officials.

Passailaigue said poor people just ought not to be buying lottery tickets unless they want to do it only for the fun. But he is scrambling to offer even more varieties of lottery games to lure them in. There will be games for the fellow with only pennies in his pocket.

This week, Passailaigue said he would like for the state lottery office to be declared a law-enforcement agency so that it could set up its own round-the-clock police force. They handle millions of dollars, you see. The state Revenue Division handles about $6 billion a year but does not require its own gendarmes.

The legislative lottery-oversight committee quickly ratified the idea and they tried to push the law through the fiscal session of the legislature. Fortunately, the governor and a few leaders said let’s think about this a while and the idea was put off until the regular session next January. The lottery hasn’t flexed its muscles yet.

Government and gambling form a dangerous liaison. The day will soon come when whatever the lottery wants it gets, whether it is its own police force or looser restrictions on promotions when lottery revenues start to lag.