BIRMINGHAM (Maggie Walsh) — Now that Gov. Robert Bentley’s lottery bill has been passed through the Senate, the House of Representatives has until Wednesday to approve the measure in order to get the bill on the ballot for Nov. 8.
And Alabamians have about 24 hours to decide where they really stand on this issue so they can contact their representative and have a heart-to-heart conversation.
The bill — SB 3, sponsored by Sen. Jim McClendon, R-Springville — is an attempt to fund the state’s $85 million Medicaid shortfall by creating a statewide and Powerball lottery, a move that Bentley claims would generate $225 million in revenue.
SB 3 made it out of the Senate with three significant amendments:
- Ten percent of lottery proceeds will go to the Education Trust Fund, as proposed by Sen. Greg Reed, R-Jasper.
- The first $100 million of lottery proceeds will go toward Medicaid once expenses are paid, as proposed by Sen. Rodger Smitherman, D-Birmingham.
- Lottery revenue cannot be used in advertising for the lottery, as proposed by Sen. Paul Sanford, R-Huntsville.
But let’s talk about that $225 million figure for a moment.
Doing the math
Although Bentley said last year that gambling was not the answer to Alabama’s fiscal problems, in announcing the August special session he said that a state lottery is “the only real choice” for funding Medicaid and that it could “provide funding that we can count on year after year.”
When asked how the $225 million figure was calculated, Yasamie August, Bentley’s press secretary, simply said it was an estimate based on the historical experience of lotteries in other states similar in size to Alabama — specifically Arkansas, Louisiana, Kentucky and South Carolina.
But of those four states, Louisiana most closely matches up with Alabama in terms of size and financial statistics. According to the 2010 census by the United States Census Bureau, Alabama’s population was 4,779,736 and Louisiana’s was 4,533,372. And the two states’ per capita income is comparable, with Alabama’s at $35,625 and Louisiana’s at $39,413, according to infoplease.com.
In 2015 the Louisiana lottery generated $184.8 million, according to “The Blinken Report: State Revenues From Gambling” published in April by The Nelson A. Rockefeller Institute of Government. Louisiana lottery revenue in 2015 was the highest it’s been since 2008, the last year of revenue included in “The Blinken Report,” and it was a year of unusual growth in lottery revenue for the state.
So even at its peak lottery income in eight years, Louisiana is more than $40 million shy of what Bentley is promising.
In fact, 27 of the 44 states that have a lottery saw declines from 2014 to 2015, “The Blinken Report” read.
Although gambling has become a popular way for states to raise revenue, the report says, “the results are short-run yields and longer-run deterioration.”
In an op-ed for the Birmingham Business Journal, Andrew A. Yerby, senior policy counsel for the Alabama Policy Institute, concluded that the $225 million figure was calculated by averaging the per capita lottery revenue of those four states and multiplying that average by the population of Alabama.
In the words of Yerby, “The calculation is unsophisticated, unreliable and untruthful as employed by Gov. Bentley.
“His claim that a lottery would be a ‘permanent solution’ to the state’s budget problems by bringing in ‘at least’ $225 million is conclusively false. No reasonable person could have honestly made those declarations based on a mere one year of data from a mere four states.”
Bentley says a lottery is “Alabama’s best option.” At the end of the day, after all the numbers are crunched, the question is: Do you agree?
To contact your representative before the Tuesday afternoon session, go to capwiz.com.