Education lottery holding House's hand on raises

Jun. 10, 2014 @ 10:29 PM

RALEIGH — Known historically for their opposition to gambling, House Republicans are doubling down on North Carolina state lottery advertising to help fund teacher raises next year.

The $21.1 billion House budget proposal that cleared several appropriations subcommittees Tuesday would raise the cap on lottery advertising spending from 1 percent of lottery sales to 2 percent. House budget-writers anticipate the change will generate $106 million more for the state, helping pay for the average 5 percent raises for school teachers.

The price tag on the House teacher raises is $178 million. House GOP leaders say obtaining the money through the lottery is preferred to cutting elsewhere in the public schools. The Senate budget approved late last month eliminated teaching assistants in second and third grades to help fund its pay plan, which raises teacher salaries by more than 11 percent on average.

House Majority Leader Edgar Starnes, R-Caldwell, said he still doesn't like the lottery and lottery advertising but said it was the will of the House Republican Caucus to raise those profits to fill a budget gap. The budget is expected to be debated by the full House Appropriations Committee on Wednesday, with floor debates and votes Thursday and Friday.

"The shortfall gave us some bad choices that we had to make," Starnes said. "So we chose one that will help us to pass the budget. Now whether it's good or bad, the public will get the chance to weigh in on that."

The North Carolina Education Lottery can generate the extra $106 million for the state in the 2014-15 fiscal year, but it will be a challenge, according to lottery executive director Alice Garland. She said it will require an additional $425 million in sales above what is currently projected — a 23 percent increase.

Sen. Tom Apodaca, R-Henderson, chairman of the Senate Rules Committee, said the lottery advertising expansion is a non-starter for his chamber in upcoming budget negotiations. He quipped that House Republicans needed to call an anti-gambling help line because they were getting addicted to lottery money.

"I don't think it's realistic," Apodaca said.

In a move that could placate social conservatives, the House budget also contains language that places additional stipulations upon lottery advertising, such as requiring the disclosure of the longer odds of winning top prizes, not just any monetary prize. The House approved similar language in a bill last year.

House Speaker Thom Tillis, R-Mecklenburg, said at a news conference the measure would improve "integrity of the lottery and really get back to the place where it was sold to the citizens of North Carolina, where the payout and the proposition is honestly presented."

Still, the increase in advertising would be a turnabout for Republicans, who fought against the games for two decades until the bill narrowly passed the legislature in 2005 and signed into law by Gov. Mike Easley. The state gets a portion of lottery revenue for education initiatives. Critics say the lottery preys upon low-income players.

Tillis' "new plan literally gambles with our children and puts their future at risk," said House Democratic Leader Larry Hall, D-Durham, blaming him for hundreds of millions of tax cuts that left less for education.

The lottery could spend $35 million on advertising in the coming year in the proposal, Garland said, providing more money to run television commercials and online ads. She said lottery officials also would move up the start date for a new numbers game and promote robustly a new multi-state game.

"My goal is to get a lot of people playing a little," Garland said.

The Rev. Mark Creech, executive director of the Christian Action League of North Carolina, said by expanding advertising "you're going to have more people looking for hope from something that undermines the work ethic and the things that actually bring hope."

The Senate also would have to go along with any changes as it and the House work out a final proposal to adjust the second year of the two-year budget approved last summer and give it to Gov. Pat McCrory to seek his signature. The new fiscal year begins July 1. Neither the Senate nor McCrory's budget contains the lottery language found in the House.

McCrory's office was still evaluating the lottery provisions in the budget, said spokesman Josh Ellis.