S.C. law requires the Legislative Audit Council to do a management review every three years to determine, among other things, whether the lottery should be “continued, revised, or eliminated.” Once again last month, the auditors dutifully completed their review, found a few problems with operations and concluded that this existential question was far too subjective for auditors to answer.
That’s understandable. Although lottery opponents were able to add the audit requirement to mitigate the damage that state-sponsored gambling has on the public, the fact is that the question of whether we continue to have a state lottery — to the extent that this is actually a question — is one that must be answered by elected officials.
And so far, as the latest audit demonstrates, the lottery is doing precisely what critics warned, and therefore what lawmakers knew it would do: It is taking money from those least able to afford it and giving it to those who least need its resources. It’s also draining money from the schools.
State law includes some restrictions on the sort of advertising the lottery can do, but you can’t force wealthy people to squander a large portion of their money on lottery tickets, and you can’t very well stop poor people from doing that. The Legislature could direct the bulk of lottery money to early childhood education, and to more and better teachers in the poorest school districts where it would help poor people. But that’s not as politically popular as spending it on scholarships, which go primarily to middle- and upper-middle-class families. And that’s what the Legislature has chosen to do.
Because other states reduced taxpayer funding for education after creating lotteries, the Legislature passed a law that said the state couldn’t reduce the percent of non-lottery state spending devoted to public and higher education after the lottery started. But as the auditors reported a year ago, that law hasn’t been followed in years.
Before the lottery was created, the Legislature devoted 57 percent of the state budget to education. Last year, the Legislature spent 52 percent of the budget on education — a shortfall of more than $400 million. Cumulatively, auditors found, the Legislature had shortchanged education by $2.1 billion through last year.
The Legislature did increase funding for public education and higher education this year — not only in total dollars but also as a percentage of state spending. But even with the increase, education funding still remains significantly below 57 percent of state non-lottery spending. (In fact, we’re so far off target that it would remain well below 57 percent even if legislators had allocated all new recurring spending to education.)
And don’t be fooled into thinking the lottery revenue makes up for the shortfall. While the lottery has generated $5.4 billion for education, nearly three-quarters of that money has been spent on scholarships, which merely changes the name on the college tuition check, without actually increasing the amount of money colleges receive to provide the education those checks pay for. Subtract that money, and you’re left with about $1.5 billion for education. That’s $600 million less than it would take just to make up for the $2.1 billion the Legislature has shorted education in tax money since it promised that the lottery would provide a windfall of extra money for our schools.
It’s important that the Legislature not just throw money at education but instead that it make wise investments in education — and in all spending. But it’s also important that lawmakers keep the promise they made that lottery spending would not reduce total education spending. As of last year, they were $2.1 billion short on that promise, and that amount is increasing every year.