In January, Governor Schwarzenegger asked Californians to accept a tax increase to fund “universal” health reform that would increase spending by $12 billion.  Almost a year later, the bill is up to $14 billion.

The governor now proposes to lease the California lottery to a private operator and use the payments to help fund his plan. The governor has said that health-care costs are everyone’s responsibility, but it remains to be seen just how responsible the proposal for lottery funding really is.

A majority of states have lotteries, and at least 20 draw on them for public education. The California State Lottery was established in 1984 through Proposition 37, which increases funding to public education without raising taxes.  At least 34 percent of lottery revenue must go to education, making up to two percent of California’s school budget. But this was not enough. In 2000, Proposition 20, the “Cardenas Textbook Act,” devoted 50 percent of the increase in lottery funds to schools and community colleges for instructional materials.

We cannot rely on gamblers to reform public education, according to a 2005 study by William Evans of the Maryland University Department of Economics, and Ping Zhang of the Public Policy Institute of California. They calculated that earmarked lottery profits “can never become the major source of finance for public education.” 

If the lottery weakens, state projects funded with lottery money wither along with it.  The North Carolina state lottery earned 25 percent less than anticipated after its first full year.  In such situations, notes a recent expose in the New York Times, states offer larger winnings to compete for loyal players. That means less money for public spending, and more money for gambling advertisements. 

Other critics of lottery funding focus on the moral implications of loosening lottery rules, and indirect “taxation” on low-income Californians.  As Steve Wiegand pointed out in the Sacramento Bee, “the lottery is a voluntary tax on the poor, the desperate, the gullible and those who are easily entertained.”

A classic demonstration of government unaccountability, some general state funds swallow lottery profits, essentially preventing the possibility of measuring lottery impact on schools, and leaving schools to rely, at least partially, on the whim of the gambling industry. States like Michigan, Texas and Illinois, settle on school budgets before receiving lottery revenue.  If the lottery does well, states use the extra money for additional projects.  In the case of underperformance, states make it up with “other sources,” or maybe schools simply get less income that year.

Fortunately, lottery profits are still a fraction of total state revenues for K-12, but the temptation remains strong for politicians to grab more lottery revenue.  So far, California legislators recognize this — lottery-funding bills in 2001 and 2004 were defeated on the Senate floor.

Whether in government or private hands, state lotteries have proven unreliable funders of education. As such they can hardly be expected to complete the task with health care. The governor's proposal is a tempting gamble for a tax-weary public.

Californians should not be swayed by fleeting pressures to enact health-care reform by impulsively throwing more money at it. Instead, we should give more choices to individual Californians.  We need laws that give us more control of our health-care dollars in tax-deductible Health Savings Accounts, and the freedom to buy health insurance independent of our workplaces.

We can create a reliable health-care system defined by choice, quality and cost-effectiveness, but the financially and politically tenuous idea to privatize the lottery is not the healthy ticket to health care reform.