RALEIGH — The governor uses funds from the North Carolina Education Lottery to support many programs generously. There is one thing, however, the education lottery appears not to fund often enough: education.
Before you pull out rocks to stone me, hear me out.
That statement isn’t an exaggeration. It’s a reflection of what county commissioners from across the state are thinking.
On Aug. 27, a group of county commissioners, and some other citizens, gathered in Greenville to discuss a possible quarter-cent sales tax that will appear on many ballots this November.
How does a possible sales-tax increase relate to the lottery? Let me explain.
In many counties, a need for education funds is driving the sales-tax referendums. The panel at the Greenville meeting noted that when the sales-tax referendum is tied to education, it often puzzles voters.
Voters think the lottery is paying for education, and they don’t understand that “just because the state says you’re going to get a certain portion of the lottery money doesn’t mean that’s so,” Lee County Commissioner Amy Dalrymple said. “We learned that hard this year.”
Scott Elliot, Pitt County manager, noted that the lottery focuses primarily on K-12 school construction. Community colleges aren’t included.
“One thing about the lottery,” said meeting moderator Todd McGee, communications director of the N.C. Association of County Commissioners, “is that every year they tinker with it. Every year.”
Though the existence of the lottery often befuddles voters as to the need for a sales-tax increase, Dalrymple said the lottery was actually part of what pushed Lee County to increase its sales tax, because the county needed control of education revenue so it could pay its bills.
To this end, counties pass resolutions stating its commission’s intent to funnel allocations from the new revenue raised by the sales-tax increase to specific purposes.
The problem is that these resolutions are nonbinding. McGee admitted this in the meeting, noting it was impossible to bind a future board to use funds in a specific way.
The board is in no way obligated actually to use the funds for the purpose stated in the resolution. The act of passing a resolution may indicate a desire, but it is not legally binding.
The same is the case with the education lottery. The revenue can’t be tracked easily, but can be pulled and used for other purposes as the governor sees fit. This is what has prompted some counties to increase their sales tax.
While the law creating the lottery designated that the money go to specific education needs, in the end the money can be used for other purposes. There is nothing that legally binds funds raised through the lottery to education.
And herein lies the irony. County commissioners are using a legally meaningless resolution to fix what they see as revenue problems for education in their counties, partly caused by the lottery. The lottery causes these problems because the law designating its proceeds to be used for education also is essentially meaningless.
Might the counties do a better job of keeping their promises? Sure. But that doesn’t change the fact that those promises lack the force of law and are fraught with the same concerns that plague the lottery.
The confusion surrounding this issue highlights a key problem of promising to use new taxes “for education.” As long as the counties and state government can shift proceeds from these taxes — sales taxes or lottery funds — to other purposes, taxpayers have no good reason to believe the promises are real.
Amanda Vuke is an editorial intern at the John Locke Foundation.