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Buildings become "enhancements'

First, you build a school. Then you hire teachers and buy books.

Or so they said back when basics were basics.

But in today's Florida, where some of America's most witless voters get exactly the kind of government they deserve, the government's obligation to basics is being redefined.

The school building is now an enhancement, somewhat like the football stadium used to be.

By saying so, the pols figure to get away with using lottery revenue to guarantee bonds to build real classrooms in those counties where you can no longer tell a schoolyard from a trailer park.

"Lottery dollars are supposed to be an enhancement to education," says House Speaker Daniel Webster. "Clearly, our plan . . . is an enhancement."

"Enhancement" was, as everyone knows, the lure when lottery promoters sold their scheme to the voters 11 years ago. It wasn't in the fine print, of course, but hey, who reads it? And why bother, when even Florida's education commissioner was vouching for the promise?

"We have within our grasp the opportunity to become a state of educational distinction," said a blurb beneath retiring Education Commissioner Ralph Turlington's picture on the official petition form for the lottery initiative, which he styled an "excellence campaign."

Distinction? Excellence? The voters finally caught on, and they have been mad as hell ever since.

While Florida legislators played shell games with the money, Georgia played straight with its new lottery. There, every penny is spent in ways the voters know would have gone begging otherwise: college scholarships; pre-kindergarten education, probably the best investment any state could make in its future; computers and other new technology. Not a cent goes to basics such as buildings or books or even teacher salaries, which remain the responsibility of the Legislature.

To appease the public, Florida legislators finally set aside some of the lottery money to expand this state's limited scholarship program.

That made sense. Bonding lottery proceeds to build schools does not. Yet this thoroughly bad idea is the only one on which all the Tallahassee big shots _ including even Senate President Toni Jennings, who gave in against her better judgment _ have been able to agree. But this is Florida, so it figures.

Aside from taking the voters for fools again, it's bad social policy.

Lottery-backed bonds might find a market, but at nothing near the favorable interest rates enjoyed by Florida school bonds that are backed by the gross receipts tax on utilities. Those bonds had an AA rating even before voters amended the Constitution to pledge the state's full faith and credit. Lottery bonds, however, would not carry the full faith and credit pledge unless approved by voters in a referendum you don't hear any politician proposing. And Wall Street is unlikely to trust the underlying source nearly as much it trusts the utility tax.

"You don't have to be a professional in this business to recognize that receipts from a lottery are not going to be perceived as as safe and secure and dependable as a gross receipts tax on public utilities," says Arnold Greenfield, a retired managing director of Lehman Brothers who was once director of Florid's bond finance division.

There's not only the unsurprising fact that Florida's lottery has peaked, as expected, but also the unpredictable impact of the next recession.

"Utilities are not a voluntary thing," Greenfield explains. "Everybody's got to use utilities. . . . If people don't even pay their taxes they're always going to pay their utility bills because if they don't, the electric company will turn their lights off. On the other hand, participation in the lottery is completely voluntary."

Common sense, as Gov. Lawton Chiles and others tried to say, would suggest expanding the gross receipts tax to include cable TV and other exempt utilities. But this is Florida, after all, so that idea died aborning. Now even Chiles is on board for gulling the public that school buildings are "enhancement" and that using the lottery to back bonds is sound fiscal policy.

The funny thing is that Chiles, just last year, vetoed a bill earmarking lottery revenue to bonds that would build "neighborhood schools."

"(T)o set such a precedent for eroding the lottery funding base through the bonding of lottery revenues, a revenue source which experiences very little growth, is not in the overall best interest of the citizens of this state," he wrote.

It will be entertaining to hear him tell the Legislature next week why he no longer thinks that is so.

Up next:BIRTHS

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