Wednesday, June 05, 2002

School Numbers Racket

The Chronicle of Higher Education's, today's news, reports on an Independent Review article by Michael Herberling, discussing how government monopolies on gambling through state lotteries can actually lead to tax increases and do little to supplement education funding.

In the end, the tax increase that the lottery was intended to prevent occurs anyway, because the initial influx of funds leads to prodigal spending. Not only that, but despite "all the rhetoric to the contrary, the states have been unable to deliver on their promise to increase spending on education by adopting the lottery," he writes. And "once a lottery is implemented, it proves nearly impossible to terminate."

So what is to be done? Mr. Heberling believes that the first step is to "remove the exemption of government agencies from oversight by the FTC" and then to consider privatizing the lotteries. "For certain activities, such as law enforcement and national defense, the government should have a monopoly," he observes. "'Running a numbers game,' however, is not such an activity."

This reminds me of a paper I heard presented at The Public Choice economics conference in San Diego, by Noel Campbell, an Assistant Professor of Business Administration at North Georgia College and State University. His paper, "How Sticky are Lottery Funds for Education?” concluded that, "lottery revenues for educational capital and technology projects have no discernable impact on county educational spending. If political support depends on such spending; it is misplaced."

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