Governor Mike Rounds is challenging legislators to find sources of revenue to address the state's dire budget shortfall. District 8 Representative (and my neighbor!) Gerald Lange answers that challenge by proposing the state increase its chunk of video lottery revenue from 50% to 70%.
My blogospheric neighbor Pat Powers lambastes the idea... but then Pat Powers would lambaste Gerry for voting to send flowers to your grandmother. Powers says taking more money from video lottery will either increase our dependence on it or drive down revenues. Industry lobbyist Larry Mann agrees with the latter, telling that Sioux Falls paper that increasing the state's share would decrease revenue... although I fail to see the connection between the share the state takes and the motivation of video lottery players to keep chunking their money into the machines.
70% may sound like a high share (especially if you're one of the kind folks making profits off addictive behavior). That Sioux Falls paper notes that Montana only takes 15%, while Oregon has a sliding scale that takes 89% from the top earning establishments.
I mentioned over at the War College that lottery may be a recession-proof business. New York saw lottery revenues increase over the first three quarters of 2008; however, many states are showing declines as the recession wears on. Some Oregon establishments have seen a drop in video lottery revenue, but the cause is more likely the economy and a new smoking ban.
Casual gamblers may cut back, but problem gamblers may hit the machines even harder. That dynamic may be all the more reason to increase the state's share, to reflect, as Rep. Lange says, the social cost gambling imposes on the state.
Perhaps the two reasons Mr. Powers gives for criticizing Lange's proposal are actually reasons to embrace it. Gambling, like smoking, is bad for society. Taxing it more helps cover the externalities Rep. Lange mentions. If those taxes rise high enough to drive some of that activity out of business, well, maybe the state still comes out ahead.
Rep. Lange says the 70% number is negotiable; he wants to "spur debate"—and that's one more reason we should be glad to have Gerry back in Pierre. You want ideas? Gerry Lange has 'em. He won't just play shell games with existing funds: he'll challenge the legislature and us to make hard choices and pay our way.
Update 10:30 CST: Representative Lange is also planning to introduce legislation to create a full veterinarian program at SDSU. Now that's serious legislating!
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