July 08, 2004

No slots at NY racetracks

As reported this morning in the Times, a New York appellate court has tossed out the law which permitted slot machines at NY ractracks. If you are curious, the 52 page opinion can be found here. This is a good thing. As the article reports, the Governor planned to use the revenues from these slot machines to make up for the imbalanced school aid provided to the public schools in New York city. Another court found the formula by which school aid was provided to be unconstitutional. So the State needs to find more money.

Let me be unambiguously clear about this, something I normally hesitate to do, I loathe the idea of lotteries and gambling being used to fund any State program or purpose. Such a thing is merely taxation by other means, indirect taxation if you will. Yes, I know that it is the choice of the participant to play and thus be taxed and if I don't play then I escape that tax. Still, that means nothing. Why? Because revenue raised this way is objectionable for at least two reasons. First, the unfair impact on those who pay. Second, I think that this form of indirect taxation defeats accountability by allowing the government to disguise the true costs of services it provides.

Unfair Impact: Who buys lottery tickets, for the most part? I believe I have read that it is the working poor and lower middle class. How do they buy them? With after-tax dollars, of course. So, if you agree that this is an indirect tax, then you will have to agree that those who purchase these tickets, and pay this tax, are doing so with money which represents a greater proportion of their after tax earnings than, say, my after tax earnings. $10 spent on lottery tickets is going to mean more to the person from a lower economic group than it will to someone in a higher economic group. I am certain that this is recognized by the politicians yet they do not care that the group least able to afford to dispose of their income in this fashion is doing so. And the politicians are abetting it. This is unfair. If taxes need to be raised to support a program, then doing it indirectly and on the backs of those least able to pay for it is unfair. And that leads me to point two.

No Accountability: I said above, "if taxes need to be raised to support a program. . ." If you fund a program from lottery or gambling monies, then you effectively remove from the public forum any reason to debate the need for the program or its funding level. Why talk about, after all, if the taxpayer isn't paying for it? I think of it as the governmental equivalent of an off balance sheet vehicle like Enron used. The result is that no one has to talk about it so no one will discuss whether what the government is doing is right. I think that governments abuse power when the possibility of open review is removed. We are supposed to have government in the sunshine and with freedom of access to information. Laws have been passed to that effect. If we as a people permit the government to sweep a program under the rug by financing public programs with tax money raised indirectly from those who can least afford to pay it, then I submit that we have a problem. Also, if there is no one to complain that the money raised is coming out of their pocket, who is going to complain that the money is not being well spent, which is an issue apart from whether the money should be spent. This system changes the oversight mechanisms built into our participatory democracy and I don't like it.

Finally, governments are like crack addicts -- they can't stay away from the cheap money. Once they go to that well, they'll keep going back. And no one will care enough to make sure it's proper. Well, my thanks today go to the Appellate Division, Third Department, of the Supreme Court of the State of New York, even if they did it for a reason other than the ones I've enunciated here.

Here endeth today's rant.

Posted by Random Penseur at July 8, 2004 07:57 AM
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