Gov. Bev Perdue has proposed a way to increase tax revenues to support education in North Carolina without raising the overall tax rates for wage earners and consumers. She would instead increase the tax on video sweepstakes parlors.
The latest bad idea from the lame-duck governor has already prompted derision from both right and left. These sweepstakes sites exist because of a court-defined loophole, despite the efforts of elected leaders to prevent the spread of this thinly veiled form of organized gambling.
The N.C. Budget and Tax Center, a left-leaning advocacy group, issued a strong condemnation of the proposal on Thursday, with which most of us can agree regardless of our political sympathies. Calling Perdue’s proposal “fiscally irresponsible,” the center’s director, Alexandra Forter Sirota, writes that the governor “would ask far more from low-income individuals and communities to fund the education, health and safety programs that our state’s communities and businesses need to thrive.”
Tax schemes that put an undue burden on those who can least afford to pay are appropriately called “regressive.” Sirota shows it’s no accident these parlors are frequented by those who can least afford to risk their hard-earned dollars for a small chance at winnings — the marketing efforts of gaming companies cynically focus on those on the lower end of the economic scale.
Sweepstakes operations prey on poor people’s vain hopes for a quick turnaround, but the odds are stacked against hitting it big, especially with any consistency. It’s the oldest rule in the gaming world: the house always wins. If it wasn’t true, no one would operate gambling ventures. Rather than trying to make a quick state revenue buck and score a little political mileage by capitalizing on the sweepstakes parlors, Perdue should work with legislators to craft a court-proof statute that will shut down these swindlers for good.
The John Locke Foundation, a right-leaning think tank, issued a report Thursday that raises questions about the urgency of this search for educational funds, which Perdue seems to think are so desperately needed. Pointing to an annual survey of North Carolina educators, the Locke report shows their assessment of classroom conditions is almost exactly the same now as it was a year ago, before budget cuts prompted statewide headlines claiming the educational system was in jeopardy.
The truth about educational funding needs probably lies somewhere in between. Even though the schools weathered those cuts reasonably well, they were offset by some federal funding that is drying up. Last year’s cuts were also slapped together out of hasty necessity by a group of inexperienced legislative leaders. Given the era of tight budgets we seem to have entered, a good idea would be to step back and reassess all of the state’s major educational initiatives, looking in a less rushed and more systematic way for waste, failed programs and redundant expenditures, as well as programs that deserve additional support due to their success and efficiency.
Our educational programs must also become less exposed to the shifting winds of the economic climate, with funding sources that are reliably secure and a spending base that is sufficiently ambitious to serve our students without being too broad to sustain during lean times. Perdue’s proposal would do none of these.
Bottom line: While there is room for broad debate and a range of opinions about the right track to safeguarding our state’s school funding and ensuring a high quality of education to all young people in North Carolina, the sweepstakes parlor idea is a bust.