If the lottery is in trouble, so is Texas

Posted Thursday, Apr. 25, 2013  comments  Print Reprints

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norman The initial House vote Tuesday to abolish the Texas lottery was: (A) a righteous moral stand against taking advantage of poor people, (B) a symbolic way to demonstrate that any proposal to legalize casino gambling in Texas won't fare well on that side of the Capitol, or (C) ordinary high jinks typical of sleep-deprived and therefore logic-limited lawmakers low on energy at that time of morning.

House members reversed their vote late that afternoon.

"I think when people took a sober look at the budget dilemma that would ensue, they voted different," state Rep. Rafael Anchia, D-Dallas, author of the bill to reauthorize operations of the Texas Lottery Commission, told the Texas Tribune.

Anchia and the bill's other supporters had time during the lunch break and afterward to push colleagues to change their votes, plus a quick meeting of the Republican caucus explored the impact of what members had done.

The man who kicked off the lose-the-lottery brouhaha is state Rep. Scott Sanford, R-McKinney. He did it, he said, "based upon the moral grounds that the lottery is a tax on poor people and is, therefore, immoral and wrong."

He cited studies that he said show that people who did not finish high school spend more on lottery tickets than people who have completed graduate school.

Other studies show that low-income households spend a larger proportion of their incomes on lottery tickets than higher-income households, Sanford said, meaning the lottery is "an extremely regressive tax."

"Let's commit to look after the interests of those who are being unfairly taxed in the name of false hope and entertainment," he said to the applause of his colleagues on the House floor. "Let's work toward removing the great state of Texas as a complicit partner in this immoral and predatory tax on those who can least afford it."

Anchia said he'd accept that, but House members would then be obligated to come up with $2.2 billion to replace lottery revenue anticipated in the 2014-15 budget they approved three weeks ago.

That's ultimately what got many members to change their votes -- that and the fact that doing away with the Lottery Commission would also outlaw charitable bingo games, a big source of revenue for some churches back in their districts.

Some members said the vote was just symbolic, anyway, that it was meant to show they were not happy with gambling as a source of state revenue.

Casino gambling proposals have been introduced again this session. They're much like those that have failed in previous sessions, but many Texans want to see one approved.

Lottery proponents, like casino gamblers, prefer to look at its proceeds as money they pay for entertainment, not as a tax. After all, nobody has to buy lottery tickets or throw dice in a casino.

But maybe Sanford is right and we should look at lottery and gambling revenue as tax revenue. And maybe we should get rid of that tax because it is regressive.

But if that's the case, Texas is in big trouble. Any tax that's not graduated according to income levels is a regressive tax.

That means the sales tax is questionable, and that's expected to bring the state $54.9 billion in the next two years, according to the comptroller's office.

It means trouble for motor vehicle sales and rental taxes ($7.9 billion), gasoline taxes ($1.4 billion) and cigarette and tobacco taxes ($1.2 billion). Probably more.

In fact, to eliminate all regressive taxation, Texas would probably have to have an income tax with graduated rates like the federal income tax.

Maybe it's better to look at the lottery as something people do for entertainment.

Mike Norman is editorial director of the Star-Telegram. 817-390-7830

Twitter: @mnorman9

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