Who is winning in Alabama?: Administrative Considerations and Financial Impact of a Lottery in Alabama

• Phillip P

Abstract

Issues concerning a proposed Educational Lottery in Alabama are discussed. Topics from both sides of the debate are addressed. Reasoning of why supporters desire a lottery to help fund a struggling school system. Opponent’s concerns are addressed in reference to the lottery being a regressive tax or “poor tax.” Alabamians express concerns of corruption and overspending. Questions of morality in the southern bible-belt region are recognized and conclusions are made to why a lottery will be slow to establish.

Keywords: education lottery, poor tax, regressive tax, morality, corruption

Who is winning in Alabama: Administrative Considerations and Financial Impact Of A Lottery in Alabama

A hot topic of debate in Alabama over the last decade has been the introduction of a lottery. Specifically, an Education Lottery, to help fund higher education in the state. In an effort to secure alternate revenues for education funding and in light of the outward success of neighbor state lottery initiatives, a lottery has long been a dividing issue for the citizens of Alabama. In an era of ever increasing higher education costs and Alabama’s traditionally poor national ranking in education, to many lottery supporters, this issue has been seen as a no brainer and an easy way to alleviate such pressures on the state’s education costs. For opponents, the lottery is simply a form of gambling contrary to traditional southern religious beliefs. Alabama’s more conservative citizens deem it a “poor tax” in their continued argument against such a proposition. Despite one’s opinion, the desperate need for improved education and increased funding is seen by either side as important and thus has kept this issue wavering at the polls for more than a decade.

This paper will look to examine the concerns of both sides and weigh the financial, political, and policy concerns and realities. The concerns of traditional values will also be discussed. This will be in an effort to give basis and to truly understand this issue often clouded in opinion and political half-truths mired in obscure data. The unintended consequences of other state administrations to implement such a system will be also brought into question to further determine the true practicality of a lottery in Alabama.

Before we begin, it is important to understand the basics of a lottery and how it brings in revenue. The basic premise of a lottery is to pool together the sales of many low cost tickets. These tickets are entered into a random drawing in which one is selected as the winner. This winner is the beneficiary of the large collected pool of money. The entity providing the game or lottery, in this case the State, subtracts its cost for providing the game and in addition receives a portion of the money which is used to fund some purpose. In most state lotteries it is education, though some states fund multiple public initiatives such as care for the elderly for example or simply their general fund. Typically only half the collected pool is awarded as the grand prize with the remainder divided on average to a 15 percent infrastructure cost and 35 percent benefit to the state (Nice, K 2003).