Maybe the state should buy some Powerball tickets

Are we the only ones who aren’t thrilled that Michigan residents now have another way to lose money gambling?

        It’s not enough that we have one multi-state lottery in Mega Millions, plus Keno, daily drawings, scratch tickets, pull tabs, raffles and more offered through the Michigan Lottery. Last week, the state added Powerball, a second multi-state game that lures people with jackpots that start out at $20 million and grow to amazing amounts. And, as everyone knows, Michigan now has dozens of casinos and is still building.

        True, the state gets crucial funding for schools from the proceeds collected from its state-run games, and pacts with the casinos generate dollars for state and local governments. Money from state-run games resulted in disbursements to the School Aid Fund in 2009 of $724.5 million, a staggering amount. And the state reports that $1.4 billion in prizes were awarded last year, although it’s unclear how much of that money went to current residents. And yes, large prizes are taxed, so part of that prize money came back to the state in incomes taxes paid.

        We have nothing against gambling per se. People should be allowed to do anything legal with their money — even throw it away. And we have supported the Gun Lake Band of Pottawatomi Indians’ right to build and operate the casino now under construction near Wayland, just north of Kalamazoo.

        What troubles us is that the state seems to be leaning more and more on gambling revenues to fund important programs when it should be looking to repair broken tax, revenue and funding mechanisms. The state’s business tax is a good example. Nearly everyone agrees it is flawed and probably hinders new business development, but we still can’t seem to fix it. Business people, taxpayers and voters have a very good reason to ask: Why not?

        Another serious concern we have with the continued expansion of gambling options in the state is that much of the money spent on lottery tickets and slot machines comes out of the pockets of people on the lower end of the income spectrum. Indeed, some cynics have described the lottery as a tax on the poor. Most of the people we can think of who are well off have money because they worked and saved, not because they won a jackpot. Remember that in gambling, the odds are always with the house; that’s how casinos are able to make money and why the lottery can produce hundreds of millions of dollars for schools.

        One way to look at gambling is that it is simply a transfer of wealth: One moment you have money, and the next moment the state or a casino has it. With Powerball, the overall odds of winning a prize are one in 35, according to the game’s Web site. But the odds of winning the big prize by matching five winning numbers plus a “powerball” number are about one in 195 million.

        Losing money to the state or to a casino has benefits for others, obviously. But if you’re the one losing the money, then you’ve lost dollars you won’t spend on other things that may actually help improve the economy more and in other ways.

        We’ve got Powerball, but we don’t have sensible business taxes. Oh boy.

        What will it take to get state officials and lawmakers to make meaningful progress on solving our worsening tax and funding problems?

        We have just one thing to say: Good luck.

— KALAMAZOO GAZETTE

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