Faced with a slump in the state economy and the prospect of a budget shortfall, Gov. Edwin W. Edwards of Louisiana last week said he would call a special session of the legislature to consider creating a state lottery and legalizing casino gambling.
Proceeds from the lottery--estimated at some $150 million in the first year and $250 million in the second--would be committed to education and to assistance for the elderly, the Governor said. Casino gambling--which would be allowed in metropolitan New Orleans and the bordering parishes of Jefferson and St. Bernard--would bring more jobs and money into the state’s economy, according to the Governor.
The proposals offer Louisiana “a choice between prosperity and continued economic decline,” Governor Edwards said. Without the new sources of revenue, he said, the state would have to raise taxes or make drastic cuts in services, including those for children, the elderly, and the needy.
Fiscal experts on the staff of the Louisiana legislature have predicted that the state could end the current budget year with a shortfall of as much as $225 million. The problem, they say, is due in part to the tax system’s dependence on revenue from the state’s oil industry, which has been hit by the worldwide drop in prices.
The special legislative session would be held Feb. 2-12. Newspapers in the state reported a mixed reaction to the Governor’s proposals, with many Baptist and Catholic groups voicing opposition to gambling.
Louisiana is one of a growing number of states that have passed or are considering lotteries to help finance education. Others include Alabama, California, Florida, Illinois, Michigan, New Hampshire, New Jersey, New York, and Ohio.
School-finance experts have cautioned in recent months that while lotteries are providing a new source of revenue for all state services, education by no means reaps a bonanza from such initiatives. Some maintain that establishing lotteries, moreover, may diminish the public’s willingness to support vital school-related tax measures. (See Education Week, Sept. 18, 1985.)
Reversal in Alabama
In Alabama, where a state lottery has been the subject of debate for several years, the Alabama Education Association has reversed its position and expressed support for the idea.
At their annual December meeting to vote on a state legislative agenda, aea delegates overwhelmingly endorsed a statewide vote on a lottery, provided that at least 50 percent of the proceeds go to the state’s trust fund for precollegiate and higher education.
In 1983, delegates also supported a lottery initiative. But in 1984 they rejected the proposal on moral grounds--a point that was hardly raised at the latest meeting, according to Paul R. Hubbert, executive secretary and treasurer for the union, an affiliate of the National Education Association.
Mr. Hubbert said he was surprised by the lack of debate on the issue. He said delegates may have been influenced by several recent statewide polls in which a majority of those surveyed said they would vote for a lottery.
In addition, he said, “folks know that the amount of education money that will be available for appropriations this year will be substantially less than the amount that was available in the past legislative session.”
State Superintendent of Education Wayne Teague has warned school districts to budget conservatively in case Alabama has to prorate its school aid because of revenue shortfalls.
Mr. Teague has said he favors a lottery, and Gov. George C. Wallace has said he would not oppose such legislation if voters approved it in a special election. Alvin Holmes, a Democratic state representative from Montgomery, has introduced legislation for the last several years that would establish a lottery and earmark at least one-fourth of the proceeds for education.
Currently, the state’s education trust fund derives its revenue primarily from state sales and income taxes. As a result, state officials say, it is highly sensitive to fluctuations in the economy.
