A Better Way to Scholarships (Editorial)

Lt. Gov. Bill Halter’s proposal to amend the state Constitution to create a state lottery for the purpose of providing college scholarships is picking up steam, naturally.

The idea of a voluntary tax – paid by someone else, of course – for such an obviously worthwhile cause is almost irresistible. And Halter’s proposal absolutely is the best of the bad lot we’ve seen over the years, which is saying a lot and not much at the same time.

But the AFL-CIO’s enthusiasm for the proposal and vow to help Halter collect the 78,000 voter signatures needed to get it on the November ballot doesn’t change our bottom-line objection: State lotteries are bad public policy.

The government should not be in the business of encouraging its citizens to gamble. And this is especially true when we know – and everyone but lottery management companies seems to know this – that the citizens who fork over the most for lottery tickets are those who can least afford it.

It is morally wrong to encourage this state’s poor and undereducated to further impoverish themselves in order to finance the college educations of the middle class. And Halter himself acknowledges that the middle class will be the primary beneficiary of the scholarships his lottery would provide.

If eliminating the affordability barrier for college is a worthy goal, how much better is the proposal put forth by Sheffield Nelson and the Southern Good Faith Fund. Instead of voluntarily taxing the least able to pay, their proposal would capture a share of the gas royalties suddenly flowing out of the rocky depth of north-central Arkansas.

This publication has previously endorsed the idea of a 4 to 5 percent severance tax rather than the 7 percent proposal for which Nelson is currently collecting signatures, and this should not be taken as a change in that endorsement.

Nor should it be taken as an endorsement of the idea that an increase in the severance tax should be dedicated solely to college scholarships – although the connection between gas royalties and education isn’t as indirect as it seemed at first. We’re hearing anecdotally that the gas producers are having a hard time finding enough qualified employees in Arkansas.

Our point is merely this: Increasing the severance tax on gas companies and, to a far lesser extent, the mineral rights owners, makes much better sense than a lottery.

We wonder that Lt. Gov. Halter hasn’t abandoned his plan completely and persuaded his financial backers to transfer their affection to Sheffield Nelson’s proposal, which has the potential to raise two or three times as much as the lottery without perpetuating the cycle of poverty in Arkansas.