It was a sad day for justice in North Carolina. Instead it was an illegitimate victory for a legislature that overstepped its constitutional parameters, and for the gambling industry which on Thursday intends to start fleecing the citizens of the Tar Heel State.
Only after a few hours of deliberation, Judge Henry "Chip" Hight dismissed the lawsuit against the lottery, saying passage of the lottery was legal and the games can proceed. In his ruling Judge Hight stated: "[T]hat all of the allegations of the complaints of both the plaintiffs and the plaintiff-intervenors alleging that the General Assembly violated Article II, Section 23 and Article V, Section 7 of the Constitution of North Carolina are without merit and should be dismissed."
Justice Robert Orr, who heads up the North Carolina Institute for Constitutional Law, argued on behalf of the plaintiffs and plaintiff-intervenors (Charles Heatherly, Thomas Spampinato, Rep. W. Edward Goodall, Jr, Rep. Paul Stam, The Wake County Taxpayers Association, the North Carolina Family Policy Council, Willis Williams, North Carolina Fair Share, and the North Carolina Common Sense Foundation) that the General Assembly violated Article II, Section 23 when it passed The Lottery Act. The North Carolina Constitution declares "revenue bills" -- or legislation that (1) raises money on the credit of the state, (2) pledges the faith of the state for the payment of any debt, or (3) imposes a tax on the people of the state -- must be voted on by both chambers of the legislature in three separate readings over three separate days. Because the Lottery Act does constitute a "revenue bill" or a "tax" as prescribed by North Carolina's Constitution, Justice Orr rightly contended the legislature did not follow proper procedures when both the House and Senate voted on the Third Reading on the same day as the second. Therefore, the lottery legislation was passed in an unconstitutional manner.
It's a considerable disappointment Judge Hight failed to stop the injustice perpetrated by the way in which the lottery garnered passage. The judge states a number of findings in his ruling, but fails to give any rationale for his decision that the lottery was passed constitutionally.
The ruling notes the State's argument that too much water was over the dam -- a finding in which Judge Hight apparently agrees. The ruling notes, "the lottery commission hired employees, entered into contracts, collected application fees, expended large sums of money, and engaged in other activities necessary for the establishment of a lottery." Also noted is "a large number of people had altered their economic, legal, and planning positions in reliance on The Lottery Act."
This is justice? -- that legislation can be ramrod through in violation of the state's constitution just as long as you can get enough people on board, and just as long as you can get a sizable number of people who have altered their lives in reliance upon it before it can be resolved in court? What about the nearly 300,000 compulsive gamblers the Lottery Act will help create in North Carolina? Will not their lives be considerably altered economically and otherwise?
Moreover, the judge's ruling is obviously based in part on the view the lottery doesn't constitute a tax because it's voluntary. As the findings of the ruling state: "[N]o person is forced to purchase a lottery ticket ... the Lottery Act does not impose a tax on the purchaser of a lottery ticket." But this is a ludicrous argument. Every day the citizens of the Tar Heel State voluntarily purchase a variety of goods and are forced to pay a tax on these products. No one forces them to purchase them. It's no different with a lottery ticket! No one is required to play the lottery, but once the ticket is bought, a mandatory 35 percent of the price is collected by the State in an "embedded" or "hidden" tax for education. So even if the purchase is voluntary, there is still an involuntary taxing taking place.
The North Carolina Family Policy Council states in Is the Lottery a Tax? Generating Revenue Through State Sponsored Gambling: "It is the lottery's function to raise money for public purposes that immediately sets it apart as a taxing mechanism .... The only difference between the purchase of consumer goods and a lottery ticket is that the tax is included in the price of the lottery ticket instead of added on to the purchase price. And this hidden tax is easily accomplished because the State has a monopoly on the lottery. Unlike other industries that produce and market their merchandise before adding the tax at the point of sale, North Carolina exclusively produces the product (in this case a lottery ticket), sells the product to consumers through approved retailers, advertises the product, and is the sole beneficiary of the revenues raised." Without question, the 35 percent is a tax!
At a press conference held at the offices of the North Carolina Institute for Constitutional Law at 3:00 p.m. last Wednesday, Justice Orr said no final decision had been made concerning an appeal. Justice Orr said he needed to converse first with his board of directors and his clients to determine the next step. Nevertheless, he implied there likely would be an appeal, saying, this was still an important constitutional issue and the case "was not a single-elimination tournament." He added if there were an appeal, it would go to the State Court of Appeals and his organization might petition that court to bypass them and go directly to the North Carolina Supreme Court.
Everything about the lottery from its start has been scandalous. In order to circumvent the normal passage of a bill through a long-standing committee, House Speaker Jim Black created a temporary select committee (the House Select Committee on the Lottery) and stacked it with lottery supporters, passing the lottery legislation in a day and sending it directly to the House floor. Then Black facilitated the passage of the measure in an unconstitutional manner by voting on the Third Reading on the same day as the Second, not allowing the "revenue bill" to be held over for a day as required for fear of losing any necessary votes for passage.
When the bill was to be taken up in the Senate, the Senate leadership couldn't muster enough votes for the legislation. So Senate President Pro Tempore Mark Basnight dismissed the Senate for the year and said no more votes would be taken until May 2006. Only two days later, when Senate lottery opponents would be missing two from their ranks, Basnight broke his word and called the Senate back for a vote on the lottery. In the same manner as House Speaker Black, Lieutenant Governor Beverly Perdue ignored the constitutional mandate to hold the bill over for a day before voting on the Third Reading, passing it by one vote after a tie.
After passage of The Lottery Act by the Legislature, it was discovered Meredith Norris, the House Speaker's political director, was also doubling as a lobbyist for Scientific Games and was influential in crafting the language of the lottery bill in order that Scientific Games would likely get the lottery contract. After the Norris fiasco, another bombshell was dropped when authorities discovered Lottery Commissioner Kevin Geddings had not disclosed he had been working for Scientific Games to the tune of $25,000. Now Judge Henry Hight suffers from what seems to be a voluntary case of judicial blindness and says he can't see the tax in a lottery. Scandalous! Scandalous! Scandalous! Unbelievable corruption from day one!
All of these facts clearly demonstrate that branches of government -- specifically the legislative and judicial branches in the Tar Heel State -- are not without their problems. They are only as good as the people who run them.
Thus the need for the prayer: God save the great State of North Carolina.
This article originally appeared on March 28, 2006.
Rev. Mark H. Creech (email@example.com) is the executive director of the Christian Action League of North Carolina, Inc.