Follow the money

North Carolina Republicans were against the lottery when Democrats enacted it in 2005 but they’re all for it now.

The GOP-led legislature now has the power to repeal the state’s gambling enterprise, which most Republicans opposed for good reasons eight years ago.

Yet, even as the N.C. Education Lottery prepares to launch an online gambling component, few legislators raise an eyebrow. To its credit, the House this summer approved a bipartisan measure that would have placed further advertising and marketing restrictions on the lottery, but Senate leaders didn’t put it up for a vote in their chamber.

The lottery has always been about money. Democrats enacted it to increase state revenue without raising taxes, and Republicans will keep it so they can maintain revenues while cutting taxes. They’ll be happy to see the lottery rake in more money, which is why they don’t object to selling lottery tickets online and why the Senate doesn’t want to curtail lottery advertising. If the lottery hits bigger numbers, it will be easier for Republicans to enact further cuts in corporate and personal income tax rates.

It apparently doesn’t matter that the lottery pulls most of its money from the least affluent citizens and that the tax cuts give the biggest breaks to those with the most money.

Legislators are more concerned about how to divide the lottery spoils. This year, they officially abandoned the original formula for allocating revenue: 50 percent for class size reductions in primary grades, 40 percent for school construction and 10 percent for college scholarships. Now, allocations can be made on a year-by-year basis according to the legislature’s whims.

The new budget sets aside 21 percent of lottery revenue for school construction, about the same as in recent years but much less than the original allotment.

Guilford County now gets about $5 million a year in school construction funds, which it uses to help pay debt from a 2008 bond package. That represents a shortfall. In each fiscal year from 2007 to 2010, the county received more than $8 million in school construction money from the lottery. The drop leaves a hole in funding for new capital needs.

Democrats began shifting lottery money when they were in charge. They also fudged on promises to use lottery money to add to regular school funding rather than displace it. It’s always been a shell game, which Republicans continue to play.

Rather than even pretend to follow a strict formula, their new lottery directive simply requires funds to be spent for education-related purposes. That leaves a lot of leeway. The legislature this year appropriated funds for the first time for private school vouchers. It didn’t tap lottery revenues for that, but it could in the future as it expands its commitment to private education.

When Democrats created the lottery, they viewed it as a pot of gold that could support their education priorities. Now the Republicans control the treasure. They’ve learned to love the lottery, but the public should keep a close eye on the money.