The Globe’s interesting article on the state lottery, which (as is well known and has been documented before) sometimes (but not always) functions to redistribute money from poorer communities to richer ones, includes a handy-dandy tool that allows you to look up lottery tickets sales vs. local aid received in your hometown to see if, on balance, your community is subsidizing others, or is being subsidized.
Some interesting data points: at about -$1.2 million, Chelsea is a net loser, as are Everett (-$2.5 million), Taunton (-$2 million), Chicopee (-$2 million) and Revere (-$500,000). But Lexington (-$700,000) and Belmont (-$500,000) are also losers. Cambridge and Somerville are both big net winners (almost +$10 million in both cases); so are Lawrence (+$9.5 million), Fall River (+$6.5 million), New Bedford (+$2.5 million), and Fitchburg (+$2 million).
So the numbers don’t always come out exactly the way you might expect. Should the local aid formula be altered to take into account how many lottery tickets were purchased in a community – i.e., the communities that are boosting the local aid fund by buying tickets themselves get a boost when it comes to doling out the money? Or would that just encourage more people to buy tickets who can’t afford it?
Perhaps folks at the Globe have been following our exchanges here (even if unattibuted) — I found this morning’s piece timely and informative.
Earlier this week, I commented here that I think lottery funds should stay where they are collected. I think lottery funds should be disbursed proportionally according to where the tickets are sold.
At least we won’t be plundering poor communities to subsidize more affluent communities. I was particularly disgusted by the figures for Brookline in the Globe’s piece.
An important reason why I think this should be done is that I think political support for the lottery would quickly dry up, and I think that’s a good thing. Yes, it would encourage more people to buy tickets who can’t afford it.
Still, I think this policy addresses the “moral hazard” that today’s formula creates for state legislators and budget planners.
I think the state would rather quickly terminate its participation in the predatory gambling business, and I think that’s a good thing.
for reality-based commentary.
😉
Big question when the lottery dips, if MA is stupid enough to proceed on the doomed casino track is, “what will happen to the formula when the gross lottery eg local aid take a 5-10% hit? Will there be a no-brain across the board reduction or a formula that accounts for communities impacted by additional predatory gambling and need?
Brookline and similar communities don’t. So stop giving them local aid, period, and give it to the cities and towns that are struggling.
Even rich communities have poor residents, who are least able to afford service cuts and regressive tax hikes.
State aid is still not a welfare program but a critical mechanism by which the Commonwealth funds essential services such as schools, public safety, and roads.
Like medicare, it should be expanded, not whittled down.
Funding it from a regressive lottery, well, that’s ripe for reform.
Which you wouldn’t solve, btw, by tinkering with the formula.
It seems to me that making lottery disbursements in a town proportional to lottery receipts from that town would at least solve the most regressive aspect of the current formula — which is that towns like Carlisle and Harvard who have NO lottery players collect local aid plundered by mostly-poor residents of towns like Chelsea.
It seems obvious to me that the best answer is to end the lottery, raise taxes on the wealthy, and use the resulting increased tax revenue to replace the blood money that the lottery rips off from the those who can least afford to be ripped off.
it’s the lottery that is regressive, sucking money out of the poorest. The formula is actually progressive, though not enough to counteract. (And any way, giving more to Chelsea is not equal to taking less from the poor.)
I agree with your conclusion.
…but was trying to come up with something that acknowledges the existence of the Lottery.
I completely agree that the lottery is regressive. Since so many of our “progressive” legislators are apparently blind to this reality, I find asking “why” — hence my “moral hazard” posture.
I see my proposal as mechanism to both address one particularly onerous aspect of the current approach, while simultaneously destroying the foundation that allows it to continue.
I think the legislature will end the lottery as soon as the money it generates stops flowing to the more prosperous districts of those “progressive” legislators.
My point is that the lottery is not really less regressive if a bigger share of the proceeds goes to poorer communities, though that may be a good idea too.
However Lottery proceeds are spent, it is still taking a disproportionate share from poorer folks, as the numbers suggest.
The lottery is regressive. Collecting taxes from poor neighborhoods and spending it on prosperous neighborhoods is regressive.
If we can stop the latter, then I think the lottery itself goes away and both problems are solved.
how much of a town’s lottery sales are from commuters or shoppers passing through a town and retail opportunities to purchase tickets? Peabody, for example, is at a highway crossroads and has significant shopping opportunities for outsiders to come in and buy tickets. This is not to discount the high percentage of sales coming from poorer communities, nor to say they travel to a mall to buy a lottery ticket.
You’re right; it’s not welfare. Which is why rich towns would make up the difference if their local aid got cut. Rich parents aren’t going to let their kids’ educations suffer, and that money will help the poor kids who go to the rich schools just as much as it helps the rich kids. I’m not proposing reducing overall local aid. I’m proposing spending it where it’s needed.
No doubt we should give considerably more aid to poorer communities – and, in fact, we do, lottery money notwithstanding. We could – and should – give even more.
That said, there are structural deficiencies built into our system that would quickly break things if we didn’t give any state aid or had drastic cuts to ‘wealthy towns’ because of prop 2 1/2.
Furthermore, what is a wealthy town? I live in a community where there are million dollar homes on the beach… and people living on foods stamps, with everything in between, including lots of seniors on fixed incomes. We’re “rich” to the eyes of many and certainly our median income is higher than most, but because of a quirk in the state ed aid formula, receive less power capita than some towns with median family incomes 30-50% higher. We also have one of the highest tax rates in the state, far higher than would be in proportion to most other towns with a similar median income, so aren’t in a position to have an override every few years just to maintain services. Other towns are in similar positions.
And your line of thought largely misses the point – there isn’t enough money in the system to begin with. Towns doing “well” are often just getting by budget wise. I wouldn’t argue most of these towns should get more, but I would argue we make the pie bigger, to give more aid to poorer communities, instead of make the bulk of communities have a smaller slice.
Progressives like Jamie Eldrige and Sonia Chang Diaz have plans to do to fairly grow the pie to incest more in all or communities, especially those that need it most,, instead of pitting one against another as you’ve done. That’s the direction we need to go in add a state. Lift up all boats, not tear each other down – which is just a recipe for more of the same in a fight cities have been losing to the burbs legislatively for decades now. Different paths are necessary, ones that don’t make this a net sum game… because too many legislators view it that way and act accordingly, to the detriment of cities and the kind of communities where we need to invest most.
the poor can’t, or are disproportionately burdened, or leave town.
A “rich” town is one with high property values and/or per capita income. It’s not (yet) a town with no poor people, though if you make it too expensive to live there (by cutting local aid) you will indeed deport the low-income riffraff to the bantustans.
Cut state aid and the rich can afford to hike local taxes, after all they (the taxes) fall disproportionately on the poor and they (the rich) have more disposable money anyway. Well-off residents can cope better with poorly maintained or poorly plowed roads, too; they can just drive the SUVs more, can afford regular maintenance for vehicles, put on snow tires, etc.
As for schools, the well off are less likely to tough it out when cuts lead to disruption and decline; they can afford private schools for their kids.
“Not welfare” means the opposite of “rich towns [should] make up the difference.” It means it’s part of how we pay for things in Massachusetts. If we stopped doing it that way we’d create greater income inequality stratified by town.
I’m against that.
as promised. Increasing revenue without additional cost to voters.
The small towns of Carlisle and Harvard together have about a quarter of the population of Chelsea and yet turned out more voters than Chelsea in the June 2013 state election.
Interestingly neither town sold a single lottery ticket but received lottery funds. Harvard received $1,252,599.00! Bet many in Chelsea who actually vote are not regular lottery players.
Isn’t this working exactly as promised?
…handing out voter registration forms with lottery purchases?
(Just to be clear this is an off the cuff question and at least a bit tongue in cheek.)
something broken.
Voters wanted a way to increase revenue without having their taxes increased. They called it a voluntary tax, while reveling in the fact that is wasn’t them or anyone they knew who would be paying this new “voluntary” tax. Brilliant!
What could be wrong with free money?
Well, if you and your family and neighbors are too smart to waste your money on lottery tickets, where does the money come from? The answer is to obvious, those that aren’t as smart – the slow, senile, lonely and addicted and the desperately poor.
The groups that the smart successful people have a responsibility to look out for in a civilized society – not use and take advantage of.
So the system is working as intended. Chelsea voluntarily donates $1,222,483.00 to Harvard, which receives $1252599.00. Ignoring the long view of social and economic problems inherent in struggling Chelsea schools losing dollars to Harvard schools.
The question is whether to expand this system with casinos. Harvard voters are too smart to allow the devastation that would come with a casino built on the border of their town and the 495 proposal was quickly killed. Will the voters of Harvard and the other upscale suburbs vote against the promises of more free money, protect the vulnerable and vote against expanding gambling on the ballot this fall?
You’re fine city is generously sending $216,000 to Weston!
The people of Weston, Harvard and Brookline are laughing all the way to the bank and to the detriment of the poor slobs who play the lottery in Waltham and Chelsea and Haverhill.
My town buys over $24 million in lottery tickets and gets just $2.5 million back – time to organize a boycott!
but yes. I have felt that way for the entire history of the lottery, and behaved accordingly, although I, too, have taken a flier on a couple of those megasized pots that dominated their news cycles. It was likely no more than 1 or 2 tickets in a calendar year.
I’ll go in on the big ones with co-workers myself, and I don’t mind having those kinds of games. But we should look to phasing out Keno, scratches, and daily numbers on a gradual basis. And defund it’s promotion. That way we can solve for the problem players while allowing a more limited game that is part of a regional compact like the Powerball which should enable revenues to be dispersed more fairly.
The basis is on where the ticket is sold, not where the purchaser lives. My hometown has no lottery agent, I buy what tickets I do buy in anywhere up to 3 surrounding towns. According to this article my town receives more from the lottery than it contributes. But who really knows? The whole things seems based on faulty data.
and that is obviously a problem with the data. Probably most people buy tickets near their homes, but there is no obvious way to track that.
low poverty rates Bolton and Boxborough (2.8 & 3.2 respectively) have low lottery sales – ($218 & $229) per person per year.
Harvard’s neighbors Shirley & Ayer with a poverty rates of 11.2% & 13.5% are spending over $691 and %1035 per person per year.
Certainly some Harvard citizens but lottery tickets, but there is a clear link to poverty and convenience of availability.
That’s how you stop the insanity of the lottery system. Always a pleasure reading your comments on this topic.
I’ve lived near Carlisle. I love Carlisle. I can only imagine the brouhaha that would explode if someone attempted to start selling lottery tickets in Carlisle. I also can’t imagine that such an agent would get more than $17 dollars in annual sales.
The data may not be perfect, but the imperfections are irrelevant to the complete accurate picture the data shows.