Earlier year this year I wrote about the recent introduction of legalized casino gambling in my home state of Maryland:
“Don’t insult me with those ridiculous claims like “the money is for education!” Money is fungible, and education is already a high-priority budget item. Money raised from slot machines and earmarked for education is simply money that would otherwise have been diverted from some other budget item. The disingenuousness of this claim is jaw-dropping, and it’s even more appalling to me how many people fall for and parrot it.”
I didn’t know the intricacies of the state’s education funding policies, but I knew enough to smell the smoke being blown up my ass. An editorial in today’s Baltimore Sun says essentially the same thing in more detail:
“The level of state spending on education is determined by a variety of state laws, most notably the 2002 Bridge to Excellence Act, better known as the Thornton Law. Neither the original 2007 slots legislation nor the gambling expansion bill passed this year change the formulas that determine how much the state sends to each county or how much each county is required to spend on its schools. The money from gambling does not come in on top of the Thornton-mandated spending. It just allows general tax revenues that would otherwise have been spent on the schools to go somewhere else. Theoretically, the state could use the slots money to increase total education funding, but it has never done so.”
It continues to disgust me that Governor O’Malley, the real-life inspiration for The Wire‘s Tommy Carcetti, makes such a disingenuous argument.
Equally disgusting is the current debate over amending the state’s casino policy to permit a sixth casino, table games, and a massive reduction in the tax on casino profits. I was in Maryland between my Europe trip and the WSOP main event, so I had a chance to see and hear the omnipresent ads both for and against the proposed change. The cynicism was jaw-dropping.
Naturally both campaigns are bankrolled by competing casino interests, but the ads make no substantive arguments about casino gambling specifically. Both make roughly the same incoherent claims about “jobs” and “schools”, issues that are only tangentially related to a decision that will have huge implications for the state and its residents.
It’s ironic (or perhaps fitting, for a casino bill) that this supposedly pro-education claim actually aims at hoodwinking gullible citizens who lack the financial literacy and/or critical thinking skills to understand how ridiculous it is. And it’s telling that the bill’s supporters have no better leg to stand-on than a bald-faced lie.
I am a big fan a letting adults decide what they want to do and what they do not want to do. As such, I like the idea of legal gambling – via the lottery, casino gambling, poker (at an individual’s house or in legislated poker rooms), and even (dare one wish?) online poker (regulated and taxed, of course). So when North Carolina FINALLY allowed the sale of lottery tickets I was thrilled.
What I was not thrilled with was the manner in which it was passed. This state has a fair share (well, unfair to those of us who are not similarly superstitious) of religious folks who feel the compulsion to make us live by the rules of their petty superstitions. They felt that gambling was wrong or, even worse, a sin. To get the lottery bill passed, two deceptive or slimy actions were taken. Legal? Yep. Slimy? Double-yep.
– “Lottery revenue will help fund education!” I cannot add anything to what’s noted in this article.
– To get a majority, the Governor (Democratic) called a special session just days after the normal legislative session ended, specifically to vote on the lottery bill. (It might have been a last-minute extension of the normal session.) Why do this? Well, it seems the bill was *this* close to passing, but had one legislator ready to vote “Nay” too many to pass. One of those Nay-sayers was a GOP legislator who had scheduled needed surgery for a couple days after the normal session ended. By calling for the vote on the day of that GOP legislator’s surgery, the necessary votes to pass the bill were available.
Although I am glad the legislature finally decided to allow NC residents to act as adults, the method used has left a bad taste in my mouth.
Wow NC has definitely one-upped MD in the sliminess department. Well played, guvnor.
As a Maryland resident, I’m certainly voting “no” to the slots for the reasons outlined above. The MD Education Association, the Budget and Tax Policy Institute, and The Baltimore Sun all point out that the claims about money going to education don’t add up.
I think you are missing the point here by making the claim that this is bullshit based on money being fungible (despite how nice it is to use the mot du jour). Two things in particular:
a) You are claiming that a top-priority budget item is by definition maxed out and any additional funds will always go to some other budget item further down the list. This is by no means automatically the case. There are a finite amount of funds to allocate, and no reason to believe that the amount allocated to education is the maximum even if the pool were bigger.
b) You don’t show why it’s impossible to treat gambling revenue as a separate revenue stream that is allocated independently of the general purse.
The newspaper article does make some points about the legislation involved, but I’m still not seeing why this isn’t possible in principle.
The far more interesting question here is: Assuming that the legislation can be worked out so that the gambling revenue does indeed go to education as promised – would you support the expansion? How important is the use of the revenue in the overall decision?
Hi nomanr, thanks for the comments. For ease of response, I’m going to pretend you labeled your last two paragraphs (c) and (d), respectively.
a) I’m not saying it’s maxed out. Indeed I believe that increasing overall revenue probably would result in some increase to funding for education. However I think it would be at best proportional and in all likelihood disproportionately small. The “Slots for Education” claim deliberately implies that, for example, $250M in new gambling revenue would mean $250M for education, which is patently false.
b) It’s not impossible. But it’s not what’s done now, and not what’s being proposed. It is, however, what’s being insinuated. That’s the problem. Also even if this did happen, it would still most likely replace rather than supplement at least some of the general revenue funds currently allocated to education.
c) The passage I quoted explicitly says that what you’re suggesting IS possible in principle, but it’s never happened (this same “education” claim has been used w/r/t the state lottery for decades) and there’s no indication that it will as a result of this new legislation. The problem is that the governor et al are claiming that gambling revenue WILL go to education, not that it COULD.
d) I probably still would not for reasons that I outlined in my post earlier this year (regressive tax, etc.). I’m sure the importance of that question varies from legislator to legislator and citizen to citizen, but the fact that it’s virtually the ONLY argument in favor of this bill is troubling.
Essentially the claim they need to win is “Our bill is good for the state”. The argument they are making is, “A) Our bill generates revenue. B) More revenue means more money for education. C) More money for education is good for the state.” Even if (B) were true, which it seems to be at least greatly overstated, it wouldn’t settle the issue. (C) is widely enough accepted that they don’t need to argue the point.
There are a lot of likely overstatements w/r/t (A) as well – among other things this bill greatly reduces the rate at which casino profits are taxed – but most importantly, there are tons of options for increasing revenue and/or decreasing costs, which amounts to the same thing. If this legislation has no extrinsic benefit and can only be sold as a necessary evil to increase revenue, then it must be compared against every other possible means of raising a similar amount of revenue. It comes up wanting because it’s inefficient (large amounts of money leave the state because slot machines convert MD residents’ income into profit for a corporation based out of state) and regressive.