A tangled web of lottery deception
Published June 21, 2014
by John Drescher, Executive Editor, News and Observer, June 20, 2014.
Sir Walter Scott, the Scottish poet, was writing 200 years ago about the Battle of Flodden Field when he described a “tangled web we weave when first we practice to deceive.” But he could have been writing about this year’s Battle of Teacher Pay.
A key part of the state House budget, which that chamber approved last week, is to raise teacher pay by juicing lottery revenue. The House said that if lottery advertising were increased from 1 to 2 percent of sales, the state could bring in an additional $106 million of lottery money and use that money for teacher pay.
But in a move that only a legislative body could muster, the House also added restrictions that would reduce lottery revenue. That’s right: The House wanted to increase lottery revenue at the same time that it was taking steps that would cut lottery revenue. Got it?
The restrictions would prohibit the lottery from advertising in connection with collegiate events, require the lottery to post both lump sum and annual payouts when advertising jackpot games, and provide better information on odds.
When the lottery took those restrictions into account, it said that raising advertising from 1 to 2 percent would bring in $47 million less than it had projected. Which means the House passed a budget that could have a gap in it. In a $21 billion budget for the year that starts July 1, $47 million isn’t huge. But it could cause a problem if other expenses rise. (Revised lottery projections were released Friday.)
Documents leaked
The public might never have learned of this potential shortfall if The News & Observer’s John Frank had not revealed in last Saturday’s paper that lottery documents, which were leaked to The N&O, projected the $47 million gap.
Lottery leaders shared their updated projections with legislators 10 days ago – but did not release them publicly. Alice Garland, director of the lottery, said she was asked by Rep. Nelson Dollar not to release the information. Dollar, a Cary Republican and key budget writer, said that wasn’t true.
Neither Dollar nor Garland handled this well. Dollar was asked by reporters on Tuesday, June 10, about whether the $106 million goal could be met. He said curtly, “We are very confident, the lottery’s very confident, that they will more than meet the goal. Next question.”
In interviews that day, Garland didn’t express concern about the $106 million. But actually, Garland wasn’t confident the lottery could meet the goal. Garland says she told Dollar of her concerns on June 10; Dollar said it was the next day.
On Wednesday, June 11, lottery officials provided reports to the legislature saying the changes would produce $59 million, not $106 million. But Garland told The N&O’s J. Andrew Curliss that day, “We haven’t run through that number.” That wasn’t true.
Dollar, meanwhile, sat on the new information.
The tangled web
The next day, The N&O asked the lottery for any documents related to projections. But the lawyer for House Speaker Thom Tillis questioned whether the projections were a public record, citing a pending lawsuit. He asked for guidance from the Attorney General’s Office. Eventually, the Attorney General’s Office said the documents could be released. There was no policy or legal reason to shield the lottery projections from public view.
This was not one of the finer chapters in state government history. Garland says she was pressured by Dollar to be quiet. But that doesn’t excuse her misleading the public. And Dollar was obligated to tell his House colleagues about the new lottery projections before they voted on their budget.
Plenty of North Carolinians are skeptical of the lottery and of the legislature. Garland and Dollar didn’t help their causes by getting entangled in a web of deception.
