Local News

Attorneys Spar In Court Over Legality Of N.C. Lottery's Passage

Posted February 13, 2006

— The law creating a state lottery in North Carolina should be repealed because legislators, in a hurried effort to avoid losing their narrow majority, violated the state constitution by not putting off a second vote for another day, a lawyer argued Monday to a judge he wants to stop work on the lottery.

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    "The question before the court has nothing to whether North Carolina should or should not have a lottery," Robert Orr, a former state Supreme Court justice, told Judge Henry Hight later during the 90-minute hearing. "The real question is whether political expediency trumps the state constitution."

    Hight said he would rule by the end of the week.

    State lawyers have asked Hight to dismiss the suit. The constitution only requires votes on separate days for laws that lead to higher taxes or borrow against the state's credit, argued Norma Harrell, an attorney with the state Attorney General's Office. The lottery isn't a tax because it doesn't require citizens to participate, Harrell said, likening it to a highway toll paid only by people who choose to use the road.

    "If a toll is voluntary, then buying a lottery ticket, your honor, is truly voluntary," she told Hight.

    The House approved the lottery bill last April by a vote of 61-59. In August, the Senate needed a tie-breaking vote from Lt. Gov. Beverly Perdue for the measure to pass 25-24. Neither chamber held the bill over for a second roll-call vote the next day, pushing it through on voice votes despite calls for delay from lottery opponents.

    "I had my light on. I had my microphone on. I said it about six times," Rep. Paul Stam, R-Wake, one of the plaintiffs, said after the hearing.

    Gov. Mike Easley signed the bill into law, and lottery executives are working to get the first scratch-off tickets behind convenience store counters by March 30 and plan to offer Powerball two months later.

    The law requires that at least 35 cents of every dollar spent on lottery tickets go to the state for education. Orr argued that's tax revenue.

    "What is this 35 percent?" asked Orr, who heads the North Carolina Institute for Constitutional Law. "It is inarguably and clearly a tax, although the Legislature didn't call it that."

    Net lottery proceeds -- expected to reach more than $400 million in the lottery's first full year -- will go to Easley's preschool initiative, public school class-size reductions and building construction, and need-based college scholarships.

    Cutting off access to that money by issuing a preliminary injunction would irreparably harm public education, Harrell said.

    "The children of this state will lose one-and-a-half million dollars a day for every day the lottery is delayed," she said.

    The hearing comes two weeks after the state lottery commission awarded a contract to Rhode Island-based GTECH Holdings Corp. to run North Carolina's lottery games for the next seven years.

    If an injunction is issued, the General Assembly could return for a special session to approve the lottery law using the procedure the plaintiffs favor, Orr said. Passage could be questionable given the narrow votes last year.

    The N.C. Education Lottery Commission is scheduled to meet Tuesday, when it will probably consider which of four agencies will receive the lottery's advertising contract. The winning firm will receive a three-year deal that includes an $8 million budget for the lottery's first year in operation.

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