Last month, I wrote that there are many problems associated with state-run lotteries.
An exhaustive study by the non-partisan Tax Foundation in Washington D.C. had this to say about Wisconsin’s lottery that is supposed to provide property tax relief:
The Wisconsin Lottery states that since 1988, $2 billion, or 32 percent of revenue, has been “returned to eligible Wisconsin taxpayers in the form of property tax credits.” In addition, when retail commissions, prizes and property tax relief are added together, at least 95 percent of total lottery revenue has “gone back to the people of Wisconsin.”
The agency boasts further, “That money stays in Wisconsin’s economy for the good of everyone.” However, private businesses could keep that revenue in the state’s economy just as easily; a state-run gambling monopoly is not necessary to keep money in the state, and if legislators want to lower property taxes, rates can simply be lowered.
Conversely, if more money for education is needed, property tax rates can be raised. It only complicates the tax code to raise money through one tax in order to lower another tax. The only thing the Wisconsin lottery really accomplishes is a redistribution of tax revenue from lottery players to property owners. Some taxpayers may think middle-and high-income homeowners are more deserving of a tax break than mostly low-income gamblers are, but the tax code should not be used to impose such moral judgments.
You can read my entire blog on state –run lotteries here.
Would the state of Wisconsin be better off appropriating its state lottery proceeds toward public education? Probably not.
The New York Times reports the following:
The newspaper has completed an “examination of lottery documents, as well as interviews with lottery administrators and analysts, finds that lotteries accounted for less than 1 percent to 5 percent of the total revenue for K-12 education last year in the states that use this money for schools.
In reality, most of the money raised by lotteries is used simply to sustain the games themselves, including marketing, prizes and vendor commissions. And as lotteries compete for a small number of core players and try to persuade occasional customers to play more, nearly every state has increased, or is considering increasing, the size of its prizes — further shrinking the percentage of each dollar going to education and other programs.”
You can read the entire New York Times article here.
