Sunday, Oct. 9, 2005
NC Lottery may
have bigger impact on SC than once thought
SC Statehouse Report
OCT. 9, 2005 - - With a new lottery expected to start in
about a year in North Carolina, South Carolina lawmakers need
to ready for a big loss of sales from a source they may not
expect: from South Carolinians.
late August, North Carolina became the last East Coast state
to approve a state-sponsored lottery. Similar to South Carolina's
lottery, North Carolina's gaming requires revenues to be used
for educational purposes. Half of the Tarheel State's revenues
are to go to reduction in size of classrooms and expansion
of pre-kindergarten programs for at-risk kids; 40 percent
for local school construction; and 10 percent to college scholarships.
North Carolina officials expect to generate about $400 million
per year in revenues for education, compared to $266 million
generated in South Carolina's fiscal year that ended June
But unlike South Carolina's law that limits the types of
games to things like scratch-card contests and Powerball,
North Carolina's law will allow the state to offer just about
"Games may include instant lotteries, online games,
games played on computer terminals or other devices, and other
games traditional to a lottery or that have been conducted
by any other state government-operated lottery."
Those 34 words of North Carolina's law could mean big trouble
to South Carolina. Why? Because they allow North Carolina
to offer addictive video poker and bar games like keno which
would draw South Carolina gamblers to North Carolina to spend
money that now goes to South Carolina.
"They have the ability to do a lot more than we can
do," S.C. Education Lottery Executive Director Ernie
Passailaigue said in a brief interview.
He said North Carolinians currently account for about 12
percent of the S.C. lottery's business. That translates into
about $32 million in potential lost revenues for educational
programs in South Carolina.
But what is unknown is how many South Carolinians will slip
over the state line to play North Carolina's games when they
arrive next year. What should be of particular concern are
Palmetto State residents from York and Lancaster counties
to those around Horry County. People in that band of northern
S.C. counties tended to be strong supporters of video poker
when it ruled the gaming roost in South Carolina a few years
back. If those folks head north to get their gaming fix, South
Carolina could lose even more revenue that lawmakers count
on for education.
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"That's the wild card here," Passailaigue said.
"We just don't know" how North Carolina's games
will affect South Carolina.
If, for example, just 10 percent of South Carolina's lottery
players started going to North Carolina to play games, the
state could lose another $27 million in education revenues
annually. In other words, North Carolina's new lottery could
cause a $60 million annual loss to South Carolina's games,
which is equivalent to half of the lottery revenues that have
gone into K-12 programs over the last 3½ years!
Since January 2002, South Carolina's lottery has been better
played than projected. To date, the program has generated
$3.2 billion in sales and some $1.2 billion in proceeds to
Concerns about North Carolina's lottery siphoning monies
from South Carolina may just be paranoid thinking for two
- When South Carolina started its lottery, Georgia officials
were worried about a big drop in revenues. But after South
Carolina got its lottery running, the impact to Georgia
was relatively light, according to published reports.
- South Carolina is likely to offer higher payouts than
North Carolina, which may keep more Palmetto State players
Unfortunately with the lure of video poker and the bingo-like
keno games that can be played every three or four minutes
in bars, South Carolina lawmakers should take a long, hard
look at tying the state too closely to lottery revenues to
improve education. The days of the games being able to exceed
revenue expectations by 10 percent every year may soon be
Another great cartoon from Bill McLemore:
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10/4: Enough taxes paid to government
To the editor:
I do not agree with you about not doing away with property
10/2). Their (sic) is enough tax paid into
the government to take care all of the service needs of the
county and the state. Why should the government make me pay
for school tax, I do not have any children in school? I know
their (sic) can be a program that would work to do
away with all property tax. The Federal and State Government
should live with a budget .Their (sic) is no such thing
that the state government cannot do away with property tax.
I pay all kinds of tax on my phone, cable, lights and food.
Also when you buy clothes their (sic) is tax. Every
time you buy or use some kind of service, you pay tax. The
money is not being spend right.
-- Dr. Ervin E. Lambert, Georgetown, S.C.
Property tax may be going to wrong uses
To the editor:
Good article (Commentary,
10/2). One factor that affects us here is that we
have such a high number of illegals in the schools as well
as using the clinics. The folks here know that while there
is no argument that we need to educate and care for all we
can, the bill is being footed by property tax - the feeling
that a sales tax or a hybrid of both may be equitable is very
strong. An article by you would exploring these issues would
be very well received.
-- Rep. Bill Herbkersman, Bluffton, S.C.
Three-legged stool out of balance now
To the editor:
You have not gone to our website
or looked at Senate bill S-880 . If you had you would know
that we only want to take about 22% of the property tax away
and replace it with a sales tax increase.The three leg stool
is out of balance now . About 55% is property taxes and the
sales tax and income tax is split on the othe (sic)
two legs . These figures are from the buget (sic) and
-- David Whetsell, Lexington, S.C.
Property taxes make local politicians accountable
To the editor:
I believe that without property taxes everyone would be looking
continually to state government for a handout. Property taxes
make local politicians accountable to their constituents.
If anything should be done, it should be a system to prevent
increases in individual rates that put people out of their
homes. Thus a freeze on valuations would be welcome. It would
protect the elderly and long time residents and protect them
from the ravages of a spiraling real estate market. If new
schools or services are required because of population increases
that the additional revenue due to the additional building
and increased valuation in the resale of existing property
would provide a means to limit the insatiable appetite of
politicians to take more and spend more.
-- Bob Pelletier, Pawleys Island, S.C.
Dumb commentary from tax promoter
To the editor:
Regarding the commentary by Andy Brack, "Getting rid
of property tax would be dumb" (Commentary,
10/2) It's been awhile since I have heard/read anything
with big words that was so stupid!
Mr. Brock (sic) completely ignores his own mentioning
that local people want more local control of their government,
by promoting MORE State government involvement........whether
it's through Income, Property, or Sales Taxes... he is nothing
but a tax,tax,tax promoter! Oh heavens, let's not reduce State
government collecting taxes and then passing them to the locals..
that would be terrible, he seems to lament.
Nothing could be further from the truth of the average taxpaying
citizen. Not only do they want control of paying their taxes,
they also want control of where the tax money is spent. They
are sick and tired of the "collect from those that can
better pay, and give out to those that want!"
And, there is no question in the minds of the average taxpayer
where services should be cut to be able to reduce tax bills...
the answer is EVERYWHERE, beginning with the high salaries
the government officials pay themselves, and ending with the
wasteful, extravagant, use of our monies!
Mr. Brock (sic) talks about problems if the economy
drops (the state will lose money) but seemingly forgets that
as the economy grows in all areas, the property taxes continue
to climb based on assessments.. AND NEVER ARE REDUCED when
there is a downturn of that precious "economy"!
Keep it up Mr. Brock (sic) .. you are the flag-bearer
of "The People shall Lose" attitudes! NOW you're
-- Daniel H. Toth, Warrenville, SC
Agree with property tax comments
To the editor:
Read your piece in the Hilton Head Island Packet (Commentary,
10/2) this morning and absolutely agree with your
comments and conclusions. However, like many of your op-eds,
you write more about what is wrong with an idea than promoting
possible solutions. An observation, not a criticism.
As you know the S.C. Senate is holding hearings throughout
the state on this issue. According to what I've heard, there
appears to be a consensus leaning toward the "Point of
Sale" method of assessing property. ... Many, many property
owners here in the Low Country have become victims of the
current system of assessing property. The "Point of Sale"
method is a win-win for everyone.
-- Tom Hatfield, Hilton Head Island
EDITOR'S NOTE: Here is Mr. Hatfield's
description of the point-of-sale method from a presentation
he made to Beaufort County lawmakers on Sept. 25:
"All property is taxed at one percent
per year of the price paid by the current owner. Taxes cannot
be increased each year by more than two percent. For example
a house that cost $400,000 would be taxed at $4,000 next
year. However, the increase in taxes for the following year
could not be more than two percent of $4,000 or $80. The
next year it would be 2% of $4,080 and so on."
Administration should snap to, Bob Logan, Little
like Red Cross,
Deborah Shealy Nye, Summit, SC
on property taxes, Alvin Jones, Easley, SC
energy is realistic,
Tom deTreville, Beaufort, SC
to serve is to drive slower,
Samuel Tenenbaum, Lexington, SC
Julius L. Brown, Hartsville, S.C.
tax isn't fair,
Ron McElhannon, Hartsville, SC
Warner B. Huck, Hilton Head Island, SC
Calbert W. Johnson, Bishopville,
learning is growing,
Prof. David Bossman, Seton
Hall University and part-time Charleston resident
on AAA credit rating, poverty
This section tracks past forecasts by Statehouse Report
with other media reports:
In Statehouse Report:
rating downgrade is red flag: "Lawmakers need
to take a serious long-term look at how they spend money
and how they raise revenues if they want to again become
the vanguard of state fiscal management. The state's
credit ratings, just like your personal credit score,
is important because the higher or better the credit
rating, the less that the state has to pay in interest
costs to fund borrowing. In short, it's an indicator
of how well the state, manages its finances."
In the Spartanburg Herald-Journal
10/2, Ulbrich: Low
taxes, lack of balance can hurt growth: "Yes,
it is important to grow the economy. Too heavy a tax
burden can hamper that growth. But so can too light
a tax burden. South Carolina ranks near the bottom among
the 50 states in most measures of tax burden and tax
effort. A tax system that doesn't provide revenue stability
and growth won't get us back our treasured AAA credit
In Statehouse Report:
poverty will require years of commitment: "The
poor and working poor comprise about one in four South
Carolinians. State officials need to remember them in
public policy decisions - - and do more to make their
lives better because if we cant do more to help
those in need of help, what does that say about our
In The State:
must address inequities to alleviate poverty: "Tremendous
inequities exist. Consider the gap between the educational
achievement of white students versus that of black students.
Or the long-term neglect of rural areas, which sorely
lack infrastructure, good schools, skilled workers and
economic development. Such gaps
wont be closed overnight, but will require persistent
commitment, courage and political will and a
lot more vision than weve seen thus far out of
our State House."
SOUTH CAROLINA SCORECARD
Here's a "thumbs up" and "thumbs down" related to various
political events from the past week:
Bannister. Congrats to Bruce Bannister, a Greenville
Republican elected last week to take the seat vacated by David
Wilkins, now ambassador to Canada.
Job growth. South Carolina is 50th in the nation.
Enough said. Again.
Geddings. Remember politico Kevin Geddings, the consultant
who served as chief of staff for Gov. Jim Hodges for awhile?
Geddings, still a consultant, has resurfaced as a new lottery
commissioner in North Carolina and already has made headlines
for a past business relationship with a major lottery vendor.
(Raleigh) News and Observer.
Emergency Management Division. The state should be
ashamed that it funds the state Emergency Management Division
at less than $1 million per year. Lawmakers need to give this
agency what it needs to it can be prepared in case we ever
have a Katrina.
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