Local Politics

Lottery, DOI say their budgets shouldn't be cut

Posted March 16, 2009
Updated March 17, 2009

State budget

— Gov. Beverly Perdue has warned that her proposed budget will include deep cuts for most programs that aren't related to education or to creating and keeping jobs in the state.

State budget could go $3B in red in fiscal 2010 Budget cuts could affect lottery, DOI

Officials with the North Carolina Education Lottery and the state Department of Insurance said they also should avoid the budget-cutting ax because they aren't funded with state tax revenue.

"Because we're funded differently, we should be treated somewhat differently," DOI spokeswoman Kristin Milam said, noting that insurance premiums paid by North Carolina drivers and homeowners pay for the department's operations.

"The General Assembly created us this way on purpose. They wanted to make sure that we were bringing in our own money," Milam said.

The state budget is in a $2.2 billion hole this fiscal year, and fiscal analysts say the deficit will grow by another $3.4 billion in the 2009-10 fiscal year, which starts in July.

Perdue has ordered state agencies to reduce spending by 9 percent, and her budget director said last week that some agencies could see cuts of up to 15 percent in the next budget.

"In these tough economic times , now is the time for all state agencies to find efficiencies,” Perdue spokeswoman Chrissy Pearson said.

Milam said the DOI has cut travel for its investigators, but she acknowledged Insurance Commissioner Wayne Goodwin and seven other department employees were attending a national conference in San Diego. She argued the conference is important to state business and that the number of North Carolina attendees had been reduced.

Deep cuts to the department's $40 million budget would compromise consumer protection through fewer insurance audits and building and fire inspections, Milam said.

The department also collects hundreds of millions of dollars in fees and license charges for the state each year, she said, meaning cuts could cost the state instead of saving money.

"We don't take taxpayer money, but we also generate a lot of income for the state," she said. "The state would not benefit. In fact, they'd probably lose money if they treated the DOI the same as other agencies."

Lottery director Tom Shaheen said cuts to the state-run numbers games also could end up costing the state revenue.

"The only place you have to cut is prize payouts, which then you would end up cutting your return," Shaheen said. "Our role as a revenue-raising agency would be totally be diminished."

The lottery expects its transfers to North Carolina educational programs between last July and June 30 will total $385 million, he said.

Like the DOI and other state agencies, Shaheen said the lottery has already trimmed travel and training.

"We'll do whatever we're told to do," he said.


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  • nceast704 Mar 17, 2009

    Facts about the Lottery.
    Shaheen promoted his secretary to a new title "special project manager" now making over 80K per year. He and her had the only assigned parking spots at the NCEL. His logic was that they always traveled together and it was easier to get back in her car when they were out of the office and returned late....WOW. Fact 2...Why were so many former GA Lottery employees hired in NC. Not the crean-of-the-crop from GA. Why did Shaheen hire the former HR manager from the GA Lottery to come to NC? She was fired from the GA Lottery...yes fired. Why do you need Lottery experience to run an HR dept.? Are there not any NC people quailfied? The NC Lottery is run like a bad used car lot and Shaheen needs to go. Ask any Lottery employee and they will all agree.get rid of him and the GA people that came with him. And.They are still hiring sales representatives that do not live near their assigned areas but the logic is...they have a state cars so they can drive all day.

  • blueridgerunner Mar 17, 2009

    The Gov., Mark and Tony can shoulder the blame for mess we're in. We were fortunate to have gotten rid of Black. But missed a grand opportunity to net the whole crooked bunch. Sheehan and the lottery should go. That 8% represents the millions it takes to advertise and promote the Lottery to the very people who will need to keep that money in their pockets. It represents the advertising required to tell people that gambling is can be addictive and to go get help. It goes to maintain the gaming network operational and to purchase airtime to announce the winning numbers, not to mention pay for the on air talent— if you want to call that talent. And it goes to print and distribute the tickets and dispose of old tickets. The Lottery was a sham to begin with. Now we're stuck with it because no one has the backbone to say enough. The gaming industry just picked our pockets.

  • JustOneGodLessThanU Mar 17, 2009

    Cutting $ for education is like slitting our own throats. As the bumpersticker says, "If you think education is expensive, try ignorance."

  • colliedave Mar 17, 2009

    In these tough economic times , now is the time for all state agencies to find efficiencies,” Perdue spokeswoman Chrissy Pearson said.

    except for the Department of Education. Sounds as if she is taking double-speak lessons from Obama.

  • JustOneGodLessThanU Mar 17, 2009

    The DOI is taking revenue $ that would otherwise come in as tax dollars. Just because the DOI spokeswoman Kristin Milam calls it something different, it’s still $ paid in by tax payers and is basically the same thing as taxes. It’s semantics and still revenue.

  • XLAW Mar 17, 2009

    All the talk about $2,300 tax "refunds" is smoke and mirrors. [George Orwell would be so proud!] The "refunds" are mostly not tax refunds - they are earned income credits which are actually welfare payments - or income transfers from tax payers to tax consumers - however you wish to describe them. Moreover, although this article doesn't mention it, Gov. Purdue is recommending raising the NC Earned Income Credit. Don't expect anything back unless you foolishly overpaid your taxes. Most "refunds" are not to the taxpayers - but the tax consumers.

  • Clinton Mar 17, 2009

    The average refund is $2,300 from IRS? Really? I don't know anyone who pulls in that kind of a refund every year. Maybe those people getting that kind of refund were Bernie Madoff clients - foetine

    foetine, while how much of a refund I receive every year really isn't anyone's business but my own - I do however receive a lot more than the 2300 that the IRS is claiming as an average and I am NOT a client of Bernie Madoff.

  • Garnerwolf1 Mar 17, 2009

    Mr. Shaheen: what about those very high (by state govt standards) that all employees of the lottery earn? Maybe just bring them back into line with other state employees would be another place you could cut.

  • shakenbake68 Mar 17, 2009

    do not cut revenue generating entities. That would not help the situation.

  • pbjbeach Mar 17, 2009

    Save state funding by doing the following STOP the fraud an corruption within the ncdot as it pertains to highway contracts that allow for contractors to be paid two an three times for bad non speceficiation work that states that if bad work is done by a contractor it is the responsibility of the contractor to fix an correct this bad work at no expense to the taxpayers of this state thank you