Sunday, November 23, 2008

Warning to Legislators On Lottery Bill

There are unintended consequences with every law, and there will be with the lottery bill as well. I am going to dispense with the moral arguments in this column, not because I think they are unworthy of discussion but simply because I am trying to reach an audience who has already factored in (and discounted) the social consequences of state supported gambling.

This article is for the legislators who are leaning toward passing the lottery bill. It is a warning that will keep them from being bitten by one of the major unintended budgetary consequences of the amendment. Based on the way the amendment is structured, the legislature better do one thing before they pass the lottery bill: slash higher education funding by at least $75 million dollars a year. Any less than that would be recklessly stupid. Twice that amount would be more prudent and would allow the legislature some flexibility.

I realize that this advice does not make sense at first glance, but you must think through to the unintended consequences. The way the amendment is structured, once a lottery bill is passed, higher education funding from other state sources can never be reduced. The legislature's hands are tied. If we have a Great Depression and there is no funding for the state's portion of Medicaid, too bad. If online courses and other innovations reduce the cost of a college education to half of current levels, too bad! If we discover that due to economic realignment that we don't need all of the colleges at the capacity that we now have, too bad! The way the amendment is written all lottery proceeds must be added to higher education funding that cannot be reduced in any way once the lottery is in place.

The only rational thing to do therefore is to reduce such funding before the lottery is in place, then fill in the gaps once we figure out how much a lottery is really good for. There will be a transition period of a year or two in which a special session may be required to make adjustments.

Do you remember last Summer when the State Game and Fish Commission got a windfall from natural gas leases? The legislature was trying to figure out a way to get some of those funds from Game and Fish, which was already well-funded with a slice of the sales tax per the constitution, to other areas with greater need. The problem was, they couldn't. The way the amendment was written gave the legislature zero flexibility to deal with the circumstance of an unexpected windfall for Game and Fish. Legislators, you are about to do it to yourselves again if you pass this lottery bill before slashing Higher Ed spending. The amendment gives you zero flexibility for the money you have allotted to Higher Ed once that lottery is passed. You'd better get your wiggle room on the front end.

There is a huge amount of evidence to support the idea that Higher Education is already one of the most over-funded areas of state government. That link takes you to facts, not platitudes and bromides based on false assumptions about "investment" in higher education. If legislators take leave of their senses, they will vote in this lottery bill without first slashing higher education. If they do that, Higher Ed will be rolling in so much dough that every community college President can have a seven million dollar mansion, just like the U of A President. This extravagance will come at a time when Arkansas families are hurting in a way not seen since the Great Depression.

Actions have consequences. I humbly urge the members of the Arkansas Legislature to consider all of the consequences, intended and unintended, before they support this bill.


Anonymous Anonymous said...

The chances of getting our state legislators to actually cut spending are twofold: slim and none. I agree with what you are saying, in order to prvent millions of dollars from being tied up for only one purpose, but I don't see them cutting spending anywhere. The Superintendents (on the taxpayer's dime, of course) will be there saying, "You can't cut our appropriations because we don't know how much the lottery will generate." And the newbies (in an age of term-limits, all are newbies) will abide in lock step.

8:27 AM, November 24, 2008  
Blogger Mark Moore (Moderator) said...

Very good, I was waiting for someone to comment that they will never cut that spending.

If they won't cut the spending, then they better not authorize the lottery.

Newbie is one thing. Stupid is another. It is brain-dead obvious what will happen if they pass a lottery bill without slashing higher ed funding first. They just got finished with a trial run on the Game and Fish gas lease revenues. I mean, just because they are new does that mean they are morons?

5:04 PM, November 24, 2008  
Anonymous Anonymous said...

No, it doesn't mean they're morons; it simply means they're new, and as such, may lack the political chutzpah to challenge the higher ed lobby, particularly that of their own local college.

Not authorize the lottery? Were you waiting for someone to comment on that, too? They're already lining up in droves to see who gets that prize, i.e. the prize of being the lead sponsor on the lottery bill that ultimately passes and becomes law. Not to mention those who are lining up for jobs to run the thing, at exorbitant salaries, of course.

I'm not holding my breath waiting for them to "slash", or even cut modestly, higher ed funding or not to authorize a lottery, nor should you.

8:57 PM, November 24, 2008  
Blogger Mark Moore (Moderator) said...

I won't of course. I HOPE the warning will be heeded, but I also have come to the place where I do not EXPECT it.

I EXPECT they will (even those who read the column) shrug their shoulders, dismiss the logic even while being unable to refute it, blunder ahead into error, and then when it all unfolds as written look for somebody else to blame.

I presume you are familiar with the portion of Jeremiah where God says if the watchman does not warn and harm follows then the guilt will be on the watchman's head, but if he warns and the people don't heed the warning then the guilt is on their own heads.

I have warned.

5:29 AM, November 25, 2008  

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