State-sponsored gambling

by | Aug 23, 2011 | News and Updates, Uncategorized

The Arizona Republic ran a front page article highlighting the surge in lottery ticket sales. According to the article, in FY2011, the state sold $584 million worth of tickets – the most ever.

In this downtrodden economy, one might surmise that the spike in sales is due to the spike in financial desperation. It’s unfortunate, since lotteries are among the highest-taxed activities in the country. It’s also a hidden tax. It’s also a regressive tax, since it hits lower income people disproportionally harder. If the poor want to gamble, that’s fine with me, but the state shouldn’t be sponsoring, advertising, enticing, and acting as the culprit in the activity.

The tax on a lottery ticket is about 24%. Where is that advertised?

But even worse than hiding the tax is the aggressiveness of state government to get people to play (and pay). The advertising budget for the state lottery is $15 million.

Lottery Executive Director Jeff Hatch-Miller:

“Even though there was a recession and times were tough, that meant for us that the state needed that money even more.” (The heck with the people who might have needed it.)

“When times are tough, people need a good rate of return if they’re going to play the game. It’s better (for the state) that they play the game – even though (the state) gets a slightly smaller percentage – than they don’t play it at all.”

From the Republic article:

But state officials say the Arizona government needs the revenue it gets from Lottery sales even more in an era of budget cuts. They point to the changes made to make the games more enticing to players, such as improving odds of winning, selling new kinds of games and improving displays. (My emphasis.)

The changes were especially important in the face of a weak economy that has consumers cutting their spending. (My emphasis.)

“We knew we would have to act to counteract the recession, especially in Arizona,” Executive Director Jeff Hatch-Miller said. “We knew we had to really get out there and start listening more clearly to the players.”

So Hatch-Miller used the power of the state to “counteract” a declining interest in gambling during a recession. Is this really the role of state government?

Despite Claim, Government Not Equipped to Pick Winners and Losers

by | Aug 12, 2011 | News and Updates, Uncategorized

Let’s hope this isn’t an indication of where things are headed in the next legislative session, or even moderately reflects Gov. Brewer’s position.

As reported in the Arizona Capitol Times:

Arizona Commerce Authority CEO Don Cardon (no relation to Wil) offered freshman Congressman Ben Quayle some gems of advice this week. As reported by my colleague, Caitlin Coakley, Quayle held a roundtable with business owners who expressed deep dissatisfaction with partisan rancor.

Cardon advised that politicians need to drop some of their hard line approaches against all things government. One example offered by Cardon, who is Gov. Jan Brewer’s go-to man when it comes to job creation, would be the objection by many to having the government “picking winners and losers” when it comes to determining which businesses and industries should or shouldn’t get tax breaks or other nifty incentives.

That said, it’s hard to believe that Cardon, who is leading the state agency that was given a $25 million “deal-closing” fund, wishes the ACA could buy a reprieve from the state Constitution’s gift clause — or at least get the Goldwater Institute to look the other way. Cardon also encouraged Quayle to double-down and adopt sure-fire stances certain to make a fiscal-conservative voter base cringe.

“The market already picks winners and losers,” Cardon told the congressman, adding that government is well suited to decide which industries could use government investment to help spring back to life. “That’s where you say, maybe I cast a vote that will end my political career in two to three years,” he said.