Monday, November 28, 2016

Powerball: Your Money or Your Life

At this writing, 44 U.S. states, the District of Columbia, and two outlying territories participate in the Powerball Lottery. That means, if you’re an American reading this, you could probably purchase a Powerball ticket right now. Odds of picking all five matching numbers and the Powerball number itself is nearly one in 300,000,000—close to the entire population of the United States in the 2010 census.

State lottery offices frequently sell such public gambling initiatives not only as opportunities for massive payouts, but investments in local issues. Much lottery revenue goes into road repair and public education. States have broad latitude for spending lottery revenue; Nebraska, where I live, dedicates some lottery takings to environmental restoration. But the most consistent portion goes into public schools. Gamble responsibly, the promise goes, and local kids get better education.

Jonathan Kozol’s book about poverty and American education, Savage Inequalities, includes a momentary aside while visiting one of America’s poorest communities, East St. Louis, Illinois. On a street so decayed, sewage literally bubbled through the pavement on rainy days, Kozol spotted a regional lottery office. These offices exist to disburse jackpots under a certain threshold, now typically around $100,000. Small beer against typical Powerball takings.

Initially puzzled by the state lottery office in such a decrepit neighborhood, Kozol has a sudden realization: “The rich,” he writes, “don’t play the lottery.” They don’t need to. They don’t require longshot odds and government largesse to overcome the stigma of their address. Job applications marked with East St. Louis addresses probably get round-filed immediately. Law professor Paul Campos writes that playing Powerball requires a special breed of desperation.

Paul Campos, professor at the University of
Colorado, Boulder, School of Law
This past January, Powerball hit its largest jackpot payout ever, nearly $1.6 billion. If that jackpot were ever paid out simultaneously, which will never happen, a single-buyer ticket winning that pot would’ve been catapulted instantly into one among the 500 richest people in America. That winner would just miss the Forbes 400 list—bottom rank, $1.7 billion—but some savvy investing and a little entrepreneurial drive could vault that last hurdle quickly.

But the promise only matters if people believe they can win such totals against astronomically long odds. It isn’t about understanding math; it’s about believing hard work and industry can overcome poverty. And poor people don’t believe that, libertarian rhetoric notwithstanding. Hard work only profits those who don’t face structural impediments. Having a “poor” address, name, or complexion excludes uncountable numbers.

But this overlaps something else Kozol writes. Most school districts get funding from property taxes—and that money mostly stays local. Communities with valuable land and houses see money percolate into better computer labs, shinier band uniforms, and more experienced career counselors. Dirt-poor communities with dwindling tax bases see their physical plants deteriorate, while skilled senior teachers move to districts that can afford better salaries. Low-value houses lead to low-value schools.

According to Kozol, even people who consider themselves liberal egalitarians get twitchy whenever anybody suggests keeping resources local that way hurt students. Propose pooling property tax resources into a statewide common pot, Kozol writes, and you’ll hear a panoply of reasons that’s impractical and unjust. They’re too long and diverse to synopsize here (Kozol recounts them well), but they have the same upshot: well-off communities refuse to support poor neighborhood schools.

But even if taxes aren’t pooled statewide, lottery revenues are. Though some Powerball and other lottery takings go to private contractors and the retailers that sell tickets, most lottery money goes into the state treasury. The money then filters back outward, generally on a formula too arcane for ordinary ticket buyers to follow. And remember, the most consistent fraction of that money gets putatively plowed back into public education.

Jonathan Kozol, author of Savage Inequalities
So, follow the reasoning here: it’s impractical and unjust for states to create a property tax pool so communities which can afford it, help bolster neighborhoods too impoverished to support their schools. It’ll never happen. But lottery revenues, mostly accrued in poor neighborhoods by people desperate for any escape hatch, go into a common pot, which gets distributed in a supposedly fair manner statewide. Are you with me so far?

This means rich communities’ resources won’t go into poor schools, but poor people pay to reinforce already rich schools. At approximately $60 billion over nearly 25 years, this represents probably the biggest hoovering of money upward on the economic ladder in history. We need to stop considering Powerball a game or a revenue stream, and call it what it is: the biggest reverse-Robin-Hood theft in world history.

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