Skip to comments.The Lottery: Really Helping Schools?
Posted on 06/27/2012 12:52:46 PM PDT by MichCapCon
Every Michigander has seen them: Mega Millions billboards advertising the money that could be yours with the right lottery ticket.
Offering instant wealth, the Mega Millions and other lottery games bring more than $2 billion in sales to Michigan. Where does this incredible sum go? Michigan Lottery advertising would have you believe that gambling is not a waste of money, but a way to benefit public education. An examination of where the money really goes, however, isnt so encouraging.
Revenue increase through painless means is the best argument for state lotteries. It is deemed better for residents to voluntarily give money to the state via gambling than for the state to raise taxes. Under the belief that people would gamble regardless of its legality, and that the lottery would significantly benefit the public school system, Michigan voters approved the constitutional amendment necessary to establish a state lottery on May 16, 1972.
Since then, the lottery has expanded from a single game to more than 70 scratch off games and numerous online games. These games have generated more than $48 billion in ticket sales.
Whereas in 1995 approximately 40 percent of Michigan Lottery funds went to the School Aid Fund, that number had decreased to 30 percent by last year. Michigan Lottery spokesperson Andi Brancato attributes this change to the increase in lottery prizes. In order to keep people interested in paying for lottery tickets, both the chances of winning and the prizes for winning have increased.
Although Brancato raises an important point, such a change highlights the fact that the majority of lottery resources are required for self-sustainment. Five cents of every dollar goes to the continued advertising of the Michigan Lottery, as well sundry expenses. Seven cents is saved for the lottery retailers, while 58 cents goes to the lottery winners. Of the $48 billion the Michigan Lottery has generated after almost 40 years, only $16 billion has gone toward educational purposes. That is equal to about 15 months of school aid based on the 2012 state appropriation of $12.9 billion.
Since 1972, the Michigan Lottery has transferred an average of $410 million to the School Aid Fund annually. But when compared with other contributions to the School Aid Fund, such as state sales tax (42.5 percent), income tax earmarking (17.7 percent) and state property tax (16.7 percent), lottery proceeds (6.6 percent) are small.
There is nothing inherently wrong with spending a few dollars on a lottery ticket. But Michiganders should not support the lottery in the false belief that most of the proceeds are going the schools. Most of the money is used to keep the lottery running a fact youll never see plastered on a flashy Mega Millions billboard.
Not mentioned in the article is how the supposed School Aid Fund money from the Lotto is used.
How much of it really gets to the classroom, to help the teachers and kids?
My guess is, very little. I'll bet most of it goes to expand the bureaucracy with more and more "administrators", strengthen the teachers unions, and get more Democrats elected.
Speaking of simple math a story from 2009
Michigan Lottery sales, taxes on cigarettes and casino gambling plummet; Gov. Jennifer Granholm says revenue decline is ‘breathtaking’
Once every state gets one, it’s really just taxing your citizens voluntarily.
Indiana made a killing on casinos from 90 to about 05 when we were the only ones to have them in the area, they were all built on the Illinois, Ohio and Kentucky borders.
Now everybody has casinos so there’s on comparative advantage.
A wise man saves for a rainy day.
A stupid politician assumes revenues will always go up.
The states just stole the idea from the Mafia.
In Michigan, the casinos lobbied for the smoking ban in bars then got an exemption from the law for themselves.
I wish we were still a free market economy.
I think it probably does get to the classroom, I just think they replaced the funding with lottery money, so the schools didn’t really come out ahead. It’s just a big money shift. I guess I’d rather fund government with lottery money than taxes anyway.
I am totally in favor of legalized gambling (my favorite form of it is the slot machine)because it is a tax on stupidity.
exact same thing passed in Indiana this year
Casinos have the big bucks to lobby
bars are usually small business folks
I’m a pro business guy but if they’re going to lobby for something, they damn well better be subject to the law that they push or the law should be nullified.
After all, if there was a big demand for non smoking bars, someone would have made a fortune by opening some non smoking bars.
Evan Bayh, as governor, got the lottery passed. Then he changed a previous executive order and allowed the UAW to organize the state employees.
He used the windfall income to pay them off and they became his personal lobbying force.
When Mitch Daniels became governor in 2004 his first act was to de-certify the union.
Well-stated, 'creek. DEFUND socialist collectives. DEPOPULATE socialists from the body politic. Take the $ of socialists away. They die. It's easy.
Socialism is legal plunder. - Frederic Bastiat 1801-1850