Letters to the Editor

Opinion: Response to early childhood development and gambling articles in the fedgazette

Published May 1, 2003  | May 2003 issue

To the Editor:
Art Rolnick, Rob Grunewald and their colleagues at the Federal Reserve are onto something big with their call for significant and sustained public investment in early care and education [March fedgazette]. They are part of a growing cadre of noted economists, such as Sylvia Hewlett and Nobel Laureate James Heckman, who also passionately and cogently argue that investments in children are worthwhile investments.

They are not alone among social scientists. Evidence abounds in the fields of developmental psychology and education that the quality of children's experiences in the first years of life affects their potential for success as students, peers and citizens. Yet it is well-known that the quality of child care in the United States is remarkably poor, with studies documenting that less than half of children in child care settings are receiving care of an acceptable standard.

The lack of public and private support in Minnesota for early care and education is deeply disturbing. Recently, under the auspices of the University of Minnesota's Humphrey Institute Policy Fellows Program, some colleagues and I surveyed current and former business and legislative leaders about early care and education, only to find that there was a barely discernible interest, and hardly a commitment, to the care and education of Minnesota's youngest citizens.

However, it may be that when economists talk, people listen. Particularly in light of the difficult decisions about funding currently being made, the compelling evidence presented by Rolnick, Grunewald and others should cause Minnesotans to put supporting early care and education high on their list of priorities.

Amy Susman-Stillman
Coordinator, Irving B. Harris Training Center
for Infant and Toddler Development
University of Minnesota
Minneapolis, Minn.

Re: Gambling

To the Editor:
I read with interest your March articles on gambling. I am a city councilor from Brookings, S.D. I wish your research would have included an analysis of the effect of gambling on money supply and the buying power within a local economy. In South Dakota, all gambling proceeds (video and ticket lottery) go to the state and there is no local municipal revenue from this venture.

Within Brookings alone, according to the state lottery stats, there is approximately $9.5 million gambled on video lottery; roughly 65 percent is paid out and 35 percent is split between the state and machine owners. It is my contention the city of Brookings is losing out on sales tax revenue from the fact that the $9.5 million is generally taken out of circulation within our community. A conservative multiplier factor I have seen used is that money turns over 1.8 times within a community. With video lottery, the money supply is "used up" or temporarily at the least taken out of circulation. This costs the city 1 percent sales tax for the general budget and another 1 percent for second penny tax. If we use the $9.5 million that is used once, that alone costs the city close to $180,000 in revenue, and that is figuring it is only lost on one turnover; the fact is the money probably is in a constant state of gambling, and the 35 percent leaves the community for the most part.

I would like to see your group do a more detailed study as to the economic impact on local communities in regards to gambling. I would contend the true cost of this phenomenon isn't just in the social aftermath, but rather the negative economic impact of money supply paralysis.

Scott Munsterman
Brookings City Council
Brookings, S.D.