Lottery Loot 

Lottery plan focuses on benefits for the middle class

Lottery plan focuses on benefits for the middle class

The great lottery money rush appears to be over, and it hasn’t been a pretty sight. The General Assembly appears close to approving a scholarship program to spend the spoils, and any inclination anyone had to do anything constructive beyond that has been trampled by the stampede of pigs to the trough.

Under the program, anyone who manages just an average score on the ACT and/or who gets a 3.0 grade point average, or both, will be eligible for a $3,000 annual payment while attending four-year colleges and universities.

The lawmakers battled mightily over the dimensions of the scholarship program, and they showed considerably more enthusiasm about giving away money than they had in the previous four years when they had to choose between reducing services or raising taxes.

During the debate over the constitutional amendment that permitted the lottery, some critics correctly argued that the lottery-money-for-scholarships approach represented a massive wealth transfer from people with low incomes to well-to-do middle class families, since lotteries historically tend to be played more by lower income people and college attendance becomes more likely as family incomes rise.

This argument was undermined somewhat because many of those who made it had never before shown any concern about taking from the poor to benefit the rich. The more relevant rebuttal was simply pointing to the voluntary nature of the lottery—everyone who plays knows that the odds of winning are slim, and nobody has to play. Even so, the spectacle of the state promoting such a boondoggle bothers many—even if they have no great moral problems with gambling in general.

The model for the Tennessee lottery program has been the Georgia lottery, which has turned over hundreds of millions of dollars to college students. It has been howlingly popular in peach country, and Tennessee politicians expect that the lottery will make them similarly admired.

But they’re not leaving anything to chance in that regard. Like in Georgia, lottery funds are also available for other worthy education purposes—capital outlays for school construction, early learning and after-school programs. These will offer a more general benefit to the state, especially to those who tend to play the lottery. But they don’t give anyone a big smile-inducing payday.

What’s been striking about Tennessee’s cash grab is just how heavily devoted to the scholarship program it’s been. The final price tag for the scholarship aspect of the program is an estimated $172 million. Lawmakers hope that another $35 million might be generated to benefit pre-kindergarten programs, although that’s on hold until the revenues actually start flowing.

The constitutional amendment the voters approved calls for the lottery primarily to provide scholarship assistance, but the 83 percent payout for scholarships is still eye-popping.

In Georgia, during the first five years of the program, only 29 percent of lottery loot went to scholarships. Of the rest, 30 percent went into pre-kindergarten programs, 21 percent went to education technology programs and 20 percent went into school construction. In more recent years, the technology and construction pieces have shrunk somewhat as demand for those elements has become sated and as the cost of the scholarship program has risen.

Those local slush funds

After some fuss last week about how some of the money for the Metro Council’s locally designated infrastructure projects was being spent, the Purcell administration reacted in its standard way.

Finance director David Manning noted that he had some concerns about the program, but added that it had begun in a previous administration. (Everything bad started before the election of Bill Purcell in 1999; nothing good started before that date in the standard Purcell argot.)

Of course, in this case, Manning is no less right just because he’s so predictable.

The program began under Phil Bredesen, who developed the idea of periodically allocating a pot of money to each district council member for projects those members could designate. Of course, the idea was tremendously popular with council members, who got the opportunity to deal with a number of local-headache issues that were frequently ignored in the citywide prioritization process.

But the result has been a drag on city spending because the projects generally haven’t represented the most efficient use of public money.

Purcell has dug his heels in a little bit more, but it’s difficult for a mayor to put the brakes on all 35 district council members once they’ve set their minds on money for local drainage, sidewalks and other projects.

Bredesen shrugged it off as a trade-off—perhaps not the most efficient use of city money, but a recognition that some of the things that look trivial when viewed from downtown get a lot bigger inside the districts. The point may be valid, but so is the one about possible waste.


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