With the recession worsening and economic turn around not in the foreseeable future, Governor Pawlenty, the state auditor and other legislative candidates signed a 'no new taxes pledge'. According to the 'Price of Government' report published by the Minnesota Department of Finance, the pledge is controversial because "it caters to a special interest group funded by wealthy conservatives rather than to the best interests of the citizens of Minnesota." An instance of this would be the shift of revenue in the form of other fees or taxes. An example here is the new fees pertaining to tuition costs and expenses. Families are now contributing 55% more to send their children to Minnesota public unviersities and colleges.
These fees or "taxes" are not just limited to tuition and education. According to Fisher, state lotteries and gambling "generate an average of 1.1 percent of state governments' total revenue and 1.2 percent of the states' general revenue." States levy higher tax rates on lotteries than cigarettes, alcohol, gasoline and other products. One possibility of this is that high tax rates create small efficient costs if demand is very price inelastic. The Census Data reports that on average about $.33 of every lottery-sale dollar results in revenue for the state government. Even if there are efficiency reasons, there are sometimes conflicting equity issues. Conversely, it may just be "simpler to collect lottery taxes, perhaps because consumers are not aware of the rates."
Minnesotans may not be aware of these rates since sales of lottery tickets has increased despite economic conditions. In an article by Martin Moylan of Minnesota Public Radio, for the second half of 2008 "Minnesota state lottery sales were up 12 percent and if the trend continues, sales for the current fiscal year will come close to $500 million." People may now be more willing to spend $1 or so on a lottery sales than spending a more substantial amount at casinos. The trade off of a $1 lottery ticket for millions in cash is worth it despite the recession. Even with most gambling and gaming down, state legislators see gambling as a way to bring in much needed revenue because of the fees or "taxes" involved that consumers are generally unaware of. According to Fisher, "the economic gain from providing lotteries is the same as the gaim from providing any service, consumers get happiness or economic welfare from consuming the service, in this case, either because of the potential for winning, because of the entertainment value, or both." With the potential to generate revenue, lotteries increase consumer welfare, but this is not the reason why governments must or should provide lotteries.