Cohen makes case for state lottery

By Thomas Wilson
STAR STAFF
twilson@starhq.com

     BLOUNTVILLE -- State Sen. Stephen I. Cohen, D-Memphis, says Northeast Tennessee already has a lottery. The trouble, he says, is the numbers game doesn't benefit anyone in the Volunteer State.
     "We have a lottery," said Cohen, who chairs the Tennessee Student Scholarship Lottery Coalition. "The problem is it's in Virginia, and we need to bring it home to Tennessee."
     Cohen spoke to the media at Tri-Cities Regional Airport on Monday morning, accompanied by former state senator Carl Moore of Bristol. An attorney by profession, Cohen has championed a state lottery for several years.
     Tennesseans will have an opportunity to lift the state's constitutional prohibition on a lottery when they go to the polls to vote on the lottery amendment in the state general election on Nov. 5.
     The amendment was passed in two consecutive General Assemblies and on final reading in 2001 by a two-thirds majority vote in both houses as required for the amendment. 
     Presently, 38 states have a government-operated lottery system. The lottery referendum must receive a "yes" vote from a majority of those voting in the gubernatorial election.
     Passage of the referendum does not create a lottery. If the amendment is passed, legislation enacting a state lottery would require a two-thirds vote in both houses of the General Assembly.
     Cohen said the lottery amendment was modeled after the state of Georgia's lottery program.
     Georgia Gov. Zell Miller launched the lottery idea in 1990 to fund a preschool program and a college scholarship program. Georgia residents ultimately passed a lottery amendment in 1992.
     The Georgia state General Assembly made the lottery law, and by 1993, Georgians were picking lotto numbers from Summerville to Savannah.
     The Georgia lottery had sales revenues over $2.449 billion for fiscal year 2002, according to the Georgia Lottery Corporation.
     However, Cohen added that lottery funds were not a cure-all for the state's financial woes.
     "The solution for Tennessee's financial problems, in my opinion, was tax reform," said Cohen, "but tax reform did not occur and will not occur in the next five years at least, if not longer."
     The 2002 General Assembly passed a funding measure that included a one percent increase of the state sales tax. Cohen said he "safely and confidently predicts that there will not be new revenue for Tennessee government let alone education in the next five years.
     "The only hope Tennessee has for education is the lottery," he said. "There is not hope for additional funding from state government."
     Students who academically qualify as "HOPE" scholars may qualify for the HOPE Scholarship in a degree program as an entering freshman at an eligible public college in Georgia. The HOPE Scholarship for students attending private colleges began with students who graduated as HOPE Scholars in 1996 or later.
     Since the lottery began in Georgia in 1993, lottery proceeds have raised $1.6 billion for both the HOPE Scholarship and the Pre-Kindergarten program and $1.78 billion in capital outlay and technology education funding, according to the Georgia Student Finance Commission.
     "In Tennessee right now we have only $6 million for pre-kindergarten programs," said Cohen. "The state of Georgia has $270 million a year, because of the lottery, in pre-kindergarten programs."
     "That's one of the reasons why our children are not prepared when they get to school; they can't read when they get to school. They're not culturized and capable of understanding and benefiting from the classroom environment," he said.
     The amendment reads that the appropriation of lottery funds would supplement but not supplant non-lottery educational resources for education programs and purposes.
     The state Legislature amended the Tennessee Constitution to ban state lotteries in 1835.
     "The key is for people to vote on Nov. 5," said Cohen. "We will have a victory on Nov. 5 when people finally get to interact with their constitution -- something that they haven't been able to do since 1834."
     He also derided lottery opponents who said the passage of a state lottery would open the door for legalized gambling typically found in casinos.
     "This provision will specifically say there will not be casinos or roulette wheels or the like," said Cohen. "That this is opening the doors for further gambling is simply a lie. You don't have people who are willing to stand up and get behind you on stuff like this before it passes," said Cohen.
     Hawaii, Utah and Tennessee are the only states without either legalized gaming or a lottery.
     The Pre-Kindergarten Program and HOPE Scholarship constitutionally dedicates lottery funds. That prospect keeps revenues from being shuffled into the state's general fund for discretionary spending -- a safety valve Cohen said would be implemented into any lottery legislation for Tennessee.
     The Tennessee Advisory Commission on Intergovernmental Relations (TACIR) has published an estimate that a Tennessee lottery will contribute approximately $300 million annually in net proceeds to education.
     Cohen added that TACIR had also estimated a lottery would add another $10 million in sales tax revenues to the state that currently leaks into bordering states with lotteries.
     He said the lottery legislation would administer lottery revenues through the "50-35-15" formula used in most states.
     Fifteen percent of lottery revenues would go to administration of the lottery program; 50 percent would pay lotto winners, and 35 percent of revenues would fund educational programs.
     The lottery amendment would not authorize bingo games if approved by voters, according to the amendment.
     The fundraising numbers game once conducted by civic clubs and nonprofit groups could be held only once a year to benefit 501(c)(3) non-profits in the state if the amendment is authorized.
     Cohen said that if the amendment was passed by voters, the timetable for implementing a lottery system would be contingent upon the Legislature's approval and how quickly the state could bid out services and materials to set up a lottery department.
     "I would hope before 2003 is out, we would have a lottery ticket sold in Tennessee," he said.