The Carville Trick

By Peter Beinart

The idea goes back 11 years, to an obscure candidate for Governor of Kentucky named Wallace Wilkinson and his then obscure political consultant, James Carville. Wilkinson was going nowhere, badly trailing his better-known opponents in the Democratic primary. Then, in a debate in Louisville, he proposed instituting a lottery and using the money for education. The next day his wife returned from a day of campaigning and reported that everywhere she went, people told her they loved the idea. Wilkinson went on to win, closing his campaign with a commercial that showed a crowd chanting, "Taxes, no! Lottery, yes!" Carville went on to Georgia, where in 1990 he made a lottery the centerpiece of another campaign for Governor, this one by Zell Miller.

Eight years later, James Carville is James Carville, Zell Miller is retiring as Georgia Governor with an 80% approval rating, and the lottery is being hailed as the secret to the Democratic Party's astonishing rebirth in the South. Last week in Alabama and South Carolina, two states that had been trending hard toward the G.O.P., Democrats ousted sitting Republican Governors by single-mindedly pledging to follow Georgia into the scratch-and-win business. Political consultants predict the issue will dominate next year's legislative session in Tennessee and the Governor's race in North Carolina in the year 2000.

Politically, the lottery solves a problem that has vexed Southern Democrats for years. The public schools in states like Alabama and South Carolina are badly underfunded and consistently score near the bottom in national rankings. But tax hating is one of the South's cherished pastimes. Carville's epiphany was that if Democrats could portray the lottery as a tax-free way to improve education, government spending could once again become a winning issue. And the Republicans, hostage to the Christian right's antigambling fervor, would be painted into a corner.

Skeptics charged that lottery proceeds would disappear into the morass of general government revenue. But once elected, Miller carefully earmarked the money for specific education programs, most notably the HOPE Scholarship, which pays state-college tuition for any Georgia high school graduate who maintains a B average. The scholarship, which has sent more than 330,000 students to college, has in a few short years attained sacred-cow status in the Peach State. The Democratic and Republican candidates to succeed Miller, each of whom once opposed a lottery, practically fell over one another to pledge HOPE's continuation. In Alabama and South Carolina, Democrats Don Siegelman and Jim Hodges both promised scholarship programs virtually identical to Georgia's.

On its face, the lottery-for-scholarship idea seems like a model of Third Way, New Democrat innovation. The HOPE money is awarded based on merit, so, unlike welfare or affirmative action, its recipients can't be stigmatized as undeserving. And it doesn't raise anyone's taxes. Dixie's Democrats have finally found a winning strategy consistent with their best principles.

Or have they? Lottery money comes largely from the poor. A 1994 Atlanta Constitution study showed that Georgians living in ZIP codes with an average per capita income of under $20,000 spent 2 1/2 times as much on tickets than residents of ZIP codes where per capita income topped $40,000. And in Alabama and South Carolina, a lottery would come on top of tax structures that already place much of the financial burden on the poor. Alabama, for instance, taxes the sale of food and clothing; its state income tax applies to people making as little as $4,200 a year, and its property tax, which falls disproportionately on the wealthy, is the lowest in the country.

Then there is the HOPE scholarship. HOPE is not means-tested for the rich: no child can be the denied the scholarship because her family has the money to pay for college. But it is, de facto, means-tested for the poor. Because the state doesn't want to spend money on kids whom Washington could be paying for, Georgia high school graduates who want HOPE scholarships must first apply for federal need-based programs like Pell Grants. And whatever they get from the feds is deducted from their HOPE scholarship. So a poor student whose tuition is covered by federal aid gets a maximum of $150 a year from HOPE for books. That is part of the reason HOPE recipients come from families almost 40% wealthier than the state average.

A few local academics and editorial boards are raising questions about the path Miller, Siegelman and Hodges have taken. "It's an incredible betrayal of the Democratic Party if they claim to believe in social equity and fairness," says John Hill of the Alabama Family Alliance, a nonprofit think tank. But right now, the South's jubilant Democrats are in no mood to listen to naysayers. As for Carville, he admits to being a bit bothered at what he has wrought, saying the lottery is "not a place where I'd want to go to spend my money." Wilkinson's former pollster Mark Mellman is bothered too. Asked about criticism of the lottery, he replied, "Thank God I don't do public policy."