When North Carolina became the last state on the East Coast to get a lottery, taxpayers were told it would fund education, a promise many in Raleigh want to break to balance the state’s budget.
The Richmond County Commissioners passed a resolution opposing two bills making their way through the North Carolina General Assembly which would authorize the state to redirect revenue from corporate sales tax and the lottery fund used by public schools to the general budget.
In a summary contained in the commissioners’ agenda packet, it says: “If the Legislature authorizes these funds to be redirected into the State General Fund, this would severely hinder the county’s ability to meet school debt obligations and to fund capital projects.”
“The lottery was passed, and was sold to the people, as going to education, and I think that’s where it needs to go,” County Commission Chairman Kenneth Robinette said Tuesday. “It’s pretty cut and dry, that lottery money should go to pay back bonds for school construction, that’s what we were told it was for. When we pass bonds, the money needs to be spent for what we sold it to the people as.”
The North Carolina Education Lottery was passed by the North Carolina General Assembly in 2005, with the promise money which had been pouring over the state’s borders with Virginia, South Carolina and Tennessee into their state lotteries would remain in the state and fund education.
Ironically, it was Gov. Bev Perdue, then the lieutenant governor, who cast the tie-breaking vote in the State Senate to pass the education lottery bill in August of 2005.
As part of Perdue’s present budget proposal, and more recently the State Senate’s budget proposal, the state would remand funding from the lottery proceeds and the corporate income tax and place them in the general fund.
Money from the state’s corporate income tax is also pledged to local boards of education, and would be commandeered to go to the state budget if these measures are passed.
“I am very much in line with the county commissioners, they are on target here,” Richmond County Schools Superintendent Dr. George Norris said. “If these bills were passed it would make it very difficult for us, and for a lot of other school districts who are trying to do construction. The ones around here are going to be in a world of hurt without these lottery and tax funds.”
Norris explained what is particularly onerous for school systems about the move the General Assembly is contemplating.
“The problem with this is that schools are going out here and doing these bonds, and our method of repaying them is through the sales tax and lottery funding,” Norris. “When they take that away from us, it really puts us in a hole.”
“This would be devastating, especially to rural counties,” Robinette said. “We don’t have the tax base some of the metropolitan areas do ... We have to scrape and fight to keep our taxes low to attract business, and who knows where this money will go if it goes into the general fund. It’ll probably end up in some rat hole somewhere, when it’s money that could’ve helped us to pay for school construction, like it was sold to the people.”
Robinette pointed out Richmond County is in the middle of paying back a bond referendum, but some other counties would be even harder hit if this passes.
“A lot of these counties are, I guess you’d say pregnant,” he said. “In that, they’ve already started building, and then this would take away a tool they had to repay the money.”
Norris expressed a belief that this is the time for school systems to build due to the competitive market in the contracting industry, and the potential jobs such construction creates.
“If you’ve got this great opportunity because construction costs are down, but you can’t build anything, that just seems like an odd way to stimulate the economy,” he said. “We’re trying to get people back to work, and particularly in this area, we have a lot of people who are out of work from construction and other trades. It seems like we’re cutting off our nose to spite our face if we do this.”
Robinette sees it as a tale of two states.
“Most of the legislation being passed is proposed by people from the metropolitan areas,” he said. “They have a lot bigger tax base, and a lot less of a percentage of their budget goes toward this type of thing. Whereas, we in Richmond County may have 45 percent of our budget go toward it, somewhere like Charlotte-Mecklenburg with a much larger budget may spend 10 or 15 percent.”
This and proposed legislation to turn the maintenance of secondary roads over to the counties are two indicators for Robinette the rural counties are not being granted an equal voice in the legislative process in Raleigh.
Still, Norris acknowledged the challenges state lawmakers face in balancing the budget, and recognized the money will have to come from somewhere - just not public education if he can help it.
“Again, this is only a proposal, and perhaps, in the end, cooler heads will prevail,” he noted.