Lottery opponents deride lottery plan

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   BLOUNTVILLE -- Calling a state lottery "an entitlement for the rich", representatives with the Gambling Free Tennessee Alliance are making a strong push to sway citizens' to vote against a referendum to authorize a state lottery system.
   "This is not just a game," said Joe M. Rodgers, chairman of the Gambling Free Tennessee Alliance, of a state lottery. Rodgers outlined the negatives of a state lottery during a press conference at Tri-Cities Aviation on Monday morning.
   "It is a transfer system from the poor to the middle and upper class," Rodgers said, and continued citing the frequency of lottery play by the poor, the elderly and "people of color" that fund scholarships for students -- most of whom are going to college anyway.
   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.
   This amendment was passed in two consecutive General Assemblies and passed on final reading in 2001 by a two-thirds majority in both houses as required for a Constitutional amendment via this method. Presently, 37 states have a government-operated lottery system.
   Dr. Paul Mason, a professor of Economics at the University of Northern Florida, joined Alliance members Monday. He warned of negatives associated with a state lottery including lost state revenues to increased state expenditures on social services due to gambling problems associated with the lottery.
   "I have studied every state that's initiated a state lottery," said Mason. "The loss of non-lottery revenue varies by state, but it's always a factor."
   He noted the state's dependence on sales taxes places the state in jeopardy of losing up to $600 million if citizens spend their money on lottery tickets rather than items subject to a sales tax.
   "Of most concern for Tennessee is the fact that Tennessee depends so heavily on sales taxes," Mason said. "Those states without a state income tax and high rates of sales and excise taxes lose considerably more non-lottery revenue as a result of instituting a state lottery."
   "People will cut back on everything, and everything is subject to those sales taxes," Mason said.
   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.
   However, Mason stated lottery revenue losses range from 15 percent to 23 percent for states operating a lottery.
   He also blasted Georgia's "Hope Scholarship" formula that provides college scholarships to high school students that academically qualify for support. The Georgia model was based on Florida's lottery revenues-to-scholarships formula, according to Mason.
   The increase of Georgia high schools' students going to college -- who weren't going to college anyway -- had risen only four percent since the Hope Scholarship program was implemented.
   Of that number, the scholarships primarily benefited middle- and upper-middle income students who already planned to go to college, he said.
   "Georgia added about seven percent to their college enrollment after instituting the lottery scholarships," said Mason.
   Not one penny of the Tennessee lottery model would go to K-12 children's classrooms or to give Tennessee teachers a pay raise, he added.
   Personal bankruptcy declarations often rise and social service costs have gone up in all 37 states with lotteries, claimed Mason, who is author of "The Economic Consequences of State Lotteries".
   Gambling opponents cited numerous reports including one released by Duke University in which researchers called state lotteries "the most regressive tax" known to them.
   Lottery players with incomes below $10,000 spend more than any income group on the lottery -- an estimated $597 per year. In contrast, players with incomes between $50,000 and $100,000 spend only $225, according to the Duke study.
   A 250-page study issued by SMR Research Corporation of Hackettstown, New Jersey reported that the 298 U.S. counties which have legalized gambling within their borders had a 1996 bankruptcy filing rate 18 percent higher than the filings in counties with no gambling. The bankruptcy rate was 35 percent higher than the average in counties with five or more gambling establishments.
   "Lotteries are not viewed by many people as taxes, so politicians love them," said Mason. "The reality is it is a tax and it allows legislatures to shirk their responsibility to develop sound tax systems for their states."
   The state Legislature amended the Tennessee Constitution to ban state lotteries in 1835.
   If citizens vote to lift the constitutional ban, the referendum does not automatically create a state lottery. If the amendment is passed, legislation enacting a state lottery would require a two-thirds vote in both houses of the General Assembly.
   Rodgers downplayed any religious influence on the Alliance's campaign to block a state lottery saying lottery proponents often sought to paint the group as "preachers".
   "This is not about morality," he said.
   The Alliance is expected to have four additional debates with lottery supporters before Nov. 5, said Rodgers.
   He also said he was skeptical about various polls that indicated 70 to 75 percent of Tennesseans favored a lottery.
   "They think they've won," said Rodgers of lottery supporters. "If we educate people, they change their minds."