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Senate lottery formula 

Booze, butts and mental health

What a story: State Sen. Janet Cowell, the Raleigh rookie, stands at the bridge, her shield in one hand, her Wharton School finance text in the other. Single-handedly, she halts the Democratic retreat from the battle for progressive taxation. Chastened and emboldened, Gov. Mike Easley, Senate President Marc Basnight and House Speaker Jim Black all turn away from the path of fiscal cowardice that is their proposed state lottery. They muster their scattered Democrat forces and charge toward-- Except it's not happening. I made it all up. The truth? "They don't need my vote," Cowell says. "I do not matter."

You'd have thought, reading the daily buzz, that the lottery thing could be stopped in the Senate, where all 21 Republicans are opposed and five of the 29 Democrats are too. That makes 26-24 against, doesn't it? A 25-25 tie would go to the lottery, courtesy of a tie-breaking vote from Lt. Gov. Bev Perdue, a lottery supporter. But first, you need one of the five Democrats--all strong progressives--to change sides.

And Cowell, who's one of the five, is also the only first-termer among them, which made me think that she'd be under a lot of pressure from party leaders to get with the program, be part of the team, yadayadayada. Nope. Monday night, when I talked to her, she said she was under no pressure at all, quite the contrary. "All is quiet on the Western front," she said. "It's like, you think you're getting ready for the battle, and the battle doesn't come."

So here's her take. The Senate will pass the lottery, perhaps as part of a larger revenue bill that also raises cigarette taxes and maybe some other taxes as well. Or the lottery and tax measures could be rolled into the budget bill and passed as one big glop.

Whatever happens, she says, it's "the leadership" calling all the shots now, having laid the groundwork for a lottery bill over several years' time prior to her recent arrival. More senior progressive holdouts, including Sens. Dan Clodfelter of Charlotte and Ellie Kinnaird of Chapel Hill, may have some say over what goes in the final lottery-revenue-budget package. There could even come a point where she has some say. But it hasn't come yet.

If Cowell had her druthers, the Senate would put the lottery to a stand-alone vote, and she'd vote no. But that won't happen unless all five Democratic opponents band together, and that's not happening. Kinnaird, for example, says she would be "forced" to vote for the lottery if it were coupled with "a sufficiently high cigarette tax increase" and a liquor tax hike earmarked for the Mental Health Trust Fund.

Kinnaird's been pushing for a 75-cent cigarette tax increase--as a way of raising money and discouraging teenage smokers--for the past four years. She'll never get a better chance at it. And the state's mental health reforms, whatever else you think of them, are chronically under-funded, which makes an earmarked liquor tax look awfully good even if--as it surely will--it undercuts the argument for regular appropriations in years to come.

So is this a good deal? How about a lottery, 40 cents on the cig tax (the governor's bid), and we go for the booze tax next year?

The problem with the lottery as a revenue measure is that it's highly regressive. The same can be said of cigarette and booze taxes--rich and poor pay about the same in taxes, regardless of income, making them regressive, too--though at least (and unlike the lottery) these can be said to discourage unhealthy behavior.

So is it really the case that Democrats can't think of a single way to raise taxes for programs they believe are needed other than to extract the money from people who don't have a lot of it?

I note, in passing, this message from Adam Searing, director of the Health Access Coalition at the N.C. Justice Center. The Senate's budget, he writes, is likely to curtail medical care for 57,000 very low-income seniors and people with disabilities, which would save the state $53 million in Medicaid matching expenditures this year and $115 million next year.

But, Searing continues, if the state were to maintain its top income tax rate on the richest North Carolinians instead of reducing it one-half of one percent, as Gov. Easley proposes, these health-care cuts for the "aged, blind and disabled" would be unnecessary.

Holding onto that top income tax rate wouldn't make the lottery "package" a good deal, not at all. But symbolically, it would tell the world the Democrats haven't given up completely on the idea of taxing people with a lot of money first.

In the House, Democratic leaders presented the rank-and-file with this choice: Pass a lottery bill, or cut education funding. Whatever the virtues of progressive taxes, they argued, a lot of conservative Democrats won't vote for them and neither will any of the Republicans.

So the lottery passed 61-59, with local progressives like Deborah Ross of Raleigh and Joe Hackney of Chapel Hill caving in. And the only deal they got, not incidentally, was a provision barring TV, radio and billboard advertising that isn't worth the disappearing ink it's written in.

I remember when casino gambling passed in New Jersey, back in my youth. We were going to have only upscale gambling, for small stakes (lots of $2 blackjack tables! It'll be fun!), and limited hours--no all-night gambling allowed. Our motives were so pure--we're only doing it to clean up Atlantic City, the pols all said.

Lasted until the first casino opened. Within a month, you couldn't find a $2 table. Today, Atlantic City's still a slum, albeit now with a better class of prostitutes. But big-time gambling is available 24/7, and the state's hooked on the action--and the take--as much as any gambler ever was.

Oh, you didn't think this was about education, did you? It's not. It's about m-o-n-e-y.

  • Booze, butts and mental health

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