AASC STUDY FINDS LOTTERY FUNDING METHOD UNSOUND
In an article in the Albuquerque Journal on September 5, 2014, the reporter relates that the American Association of State Colleges and Universities, in a “…study of lottery scholarship states, including New Mexico, has found that despite the popularity of using the gambling money to fund educational programs, they ultimately create more problems than they solve.” A startling revelation to many.
Some of the problems listed were that projections of lottery revenue are rarely achieved, the money spent on lotteries reduce the amount of revenue collected from gross receipts taxes from regular consumer spending, the states spend less money on education from the general fund, and that it is ethically questionable for the state to raise money from encouraging its citizens to gamble.
Other studies have found that lottery states proportionally spend a smaller total amount of money on education than non-lottery states, by reducing education money from the general fund. One of these studies found that welfare spending went up in the lottery states. Not hard to understand when you figure out who spends the most on lottery tickets.
Other studies have noted “grade-point creep,” occurring when the lottery is introduced. This means that state schools, in order to increase lottery fund revenue, reduce academic standards to get more students to qualify for the lottery.
In the Journal article, Senator Michael Sanchez said that, “I would rather fall on the side of access to higher education for those students, who would never have had the opportunity.” He echoed the initial advocates of the state lottery in New Mexico who said that the lottery would allow thousands of low income families to send their students to the universities who wouldn’t otherwise have had that opportunity.
In fact, various studies of New Mexico and other state lotteries have discovered that the lottery revenue mainly pays the tuition for students from moderate to upper income class families. In addition, studies have found that the majority of lottery revenue comes from the lower educational and income classes. The result is that we have the relatively poor and uneducated families mostly paying the tuition for the middle and upper income students through the lottery. A more regressive form of taxation is impossible to find.
Taxation is the proper term for the revenue raised by the lottery. Lottery supporters say that the revenue is not taxation because it is voluntary, but the taxes on cigarettes and alcohol are also voluntary, and many economists have correctly labeled lottery income as “taxation.”
There are certainly more honorable and productive ways that New Mexico could help assist the education of qualified, needy students. The American Association of State Colleges study presents more evidence that state sponsored gambling is a failed government program and should be terminated as quickly as possible.
