John Hood's Daily Journal

The Education Lottery is used to fund many things through the Governor’s generous use of the revenue. There is one thing the education lottery doesn’t appear to fund: Education.


By Amanda Vuke


October 15, 2010

This week’s “Daily Journal” guest columnist is Amanda Vuke, Editorial Intern for the John Locke Foundation.

RALEIGH — The Education Lottery is used to fund many things through the Governor’s generous use of the revenue. There is one thing the education lottery doesn’t appear to fund: Education.

Before you pull out rocks to stone me, hear me out.

That statement isn’t overexaggeration. It’s a reflection of what county commissioners from across the state are thinking.

On Aug. 27, a group of county commissioners, and some citizens, gathered in Greenville to discuss a possible quarter-cent sales tax that will appear on many ballots this November.

How does a possible sales-tax increase relate to the lottery? Let me explain.

In many counties, a need for education funds is driving the sales-tax referendum. The panel at the Greenville meeting noted that when the sales-tax referendum is tied to education, it often puzzles voters.

Voters think the lottery is paying for education, and they don’t understand that “just because the state says you’re going to get a certain portion of the lottery money doesn’t mean that’s so,” Lee County Commissioner Amy Dalrymple said. “We learned that hard this year.”

Scott Elliot, Pitt County manager, commented that the lottery focuses primarily on K-12 construction. Community colleges aren’t included.

“One thing about the lottery,” said meeting moderator Todd McGee, communications director of the N.C. Association of County Commissioners, “is that every year they tinker with it. Every year.”

Though the lottery often befuddles voters as to the need for a sales-tax increase, Dalrymple said the lottery was actually part of what pushed Lee County to increase their sales tax, because the county needed control of education revenue so they could pay their bills.

The Irony

To this end, counties pass resolutions stating the board’s decision for fund allocations from the revenue raised from the sales-tax increase.

The problem with this solution to directing funds toward a specific purpose is that these resolutions are nonbinding. McGee admitted this in the meeting, noting it was impossible to bind a future board to use funds in a specific way.

The board is in no way obligated actually to use the funds for the purpose stated in the resolution. The act of passing a resolution may indicate a desire, but it is not legally binding.

The same is the case with the education lottery. The revenue can’t be tracked easily, but can be pulled and used for other purposes as the governor sees fit. This is what has prompted some counties to increase their sales tax. While the law creating the lottery designated that the money go to specific education needs, in the end the money can be used for other purposes. There is nothing that legally binds funds raised through the lottery to be used for education.

And herein lies the irony. County commissioners are using a legally meaningless resolution to fix what they see as revenue problems for education in their counties, partly caused by the lottery. The lottery causes these problems because the law designating its proceeds to be used for education is also essentially meaningless.

Might the counties do a better job of keeping their promises? Sure, they might. But that doesn’t change the fact that their promises are legally meaningless and legally fraught with the same issues that plague the lottery.

The confusion surrounding this issue highlights a key problem of promising to use new taxes “for education.” As long as the counties and state government can shift proceeds from these taxes — sales taxes or lottery funds — to other purposes, taxpayers have no good reason to believe the promises are real.

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