Topic Area: Gambling/Lotteries and Environmental Protection

Geographic Area: Colorado, USA

Focal Question: How effective, if at all, is the use of Colorado Lottery revenues towards land use protection?

Sources:

(1) Steelman, Toddi A. “Innovation in Land Use Governance and Protection”. American Behavioral Scientist. Dec. 2000, Vol. 44 Issue 4, p580-99.

(2) Hansen, Ann. “The Tax Incidence of the Colorado State Lottery Instant Game”. Public Finance Quarterly. July 1995. Vol. 23 Issue 3, p. 385-99.

(3) Winn, Kristin. “A Dream Realized in Colorado”. Parks & Recreation. Oct. 1997. Vol. 32 Issue10, p. 18-20.

Reviewer: Rob Belcher, Colby College ‘02

Review:

Colorado is a state plagued with high growth rates. It was, and still is, one of the fastest growing states in the country. A decade ago the growth rate was at 11.4% per year while the rest of the country was around 4.7% (Steelman 583). Colorado, a state known for its amazing landscapes and vistas, is becoming one suburban residential development and strip-mall subdivision.

Voters, distressed at this situation, approved an amendment in 1992 that instated the Great Outdoors Colorado (GOCO) program (Steelman 583). The GOCO program is a state agency that “uses funds from the Colorado Lottery to match funds from local governments, park and recreation districts, Colorado State Parks, Colorado Division of Wildlife, and non-profit land protection organizations for programs involving trail construction, the purchase of parks and park enhancement, open space, wildlife and river preservation, and environmental education” (Steelman 5830). Towns, Cities, Counties and the state are also given percentages of the Colorado Lottery revenue (Winn 18, Hansen 14). The Colorado Lottery program includes instant-win scratch tickets, and weekly Lotto, Keno and multi-state Powerball games (Hansen 580).

GOCO’s grant process is very competitive and detailed. Each project proposal is considered on several criteria, “including the presence of partnerships with other local, regional, state, and federal entities; a cash or in-kind match to the dollars requested in the grant (a 25% match is required (Steelman 584)); that the proposed project be part of a larger plan in the community, region, or state; and the sustainability, impact, and urgency of the project” (Steelman 584). Projects are then accepted by first the GOCO staff, and then narrowed down by the GOCO Board of Directors, which is appointed by the Governor and verified by State Legistlature and has strict political and regional requirements (Steelman 584).

One study done, that of Toddi Steelman and his research assistants, Kevin M. Luten and Karl A. Wunderlich, analyzed in-person interviews of a random sample of GOCO grant applicants on several questions, all of which pertained to the overall effectiveness and experience of the grant implementation (Steelman 584).

This study concludes that the use of lottery revenues through the state agency of Great Outdoors Colorado was very effective overall, but also provided several suggestions that would make the agency more helpful to the communities it is dealing with (Steelman 584).

The lack of available technical expertise from GOCO is one of the weaker aspects of the program identified in Steelman’s study (Steelman, 585). “Seventy-six percent used some form of external technical expertise, and nearly half said they could use additional technical assistance. Many of the applicants identified technical expertise they needed, including help with easement acquisitions and negotiation, engineering, environmental consulting, grant writing, land appraisal, trail construction, and mapping” (Steelman 585).

Another of the suggestions discussed is the minimum fund matching requirement of 25%, which half of the interviewees found as a limiting factor for further protection projects (Steelman 585). Some of the interviewees who participated in more successful projects also had in place a special sales tax dedicated to open space (Steelman 585). It appears that the Colorado Lottery revenue provides adequate funds for state-wide protection projects through GOCO, if only the communities’ are able to meet the application requirements.

As previously mentioned, cities, towns, counties and the state are also given percentages of Colorado Lottery revenues outright. This use of the lottery funds, independent from GOCO, has also seen great success in preserving and upgrading land. The town of Grand Junction, one of the largest western Colorado communities, was able to construct its first new park since 1922 with Lottery revenues (Winn 18). The town used a total of more than $1.6 million lottery dollars (accrued over several years) to purchase 111 acres of land and build state-of-the-art recreation facilities for the park, entitled Canyon View Park (Winn 18).

Colorado Lottery revenues have proven to be quite effective over the past decade for protecting and preserving Colorado lands (Steelman 585, Winn 19). Lottery excise tax regressivity is one final point that is necessary to acknowledge with the use of lotteries to fund land preservation. Lottery excise tax regressivity has been found to exist for Colorado Lottery instant games for 1989 (Hansen 385). It can then be deduced that the possibility of a free rider effect exists, for higher income groups who benefit from the land preservation without contributing to the purchase and maintenance of the land through the Colorado Lottery gambling system.