Breaking down the education lottery money
There’s still no state budget in Raleigh as lawmakers try to figure out how to pay for North Carolina’s spending.
One of the biggest issues has been education funding, and many are wondering where the billion dollars for education from the lottery has gone.
According to state law, at least 50-percent of the money the lottery brings in goes to pay out prizes. No more than seven percent pays commissions to retailers who sell the tickets; no more than eight percent goes to lottery commission expenses.
That leaves, by law, at least 35-percent for the state’s Education Lottery Fund.
See, according to the State Lottery Commission, in the lottery’s first full year, the payouts were pretty much on target. Thanks to a little rounding off, the numbers add up to 101-percent, but let’s not get bogged down by the small stuff.
Because of bigger prize payouts in year two, only 32-percent of lottery money went to education.
So what about that mandate education get at least 35-percent?
A lottery spokesperson points a loophole.
The law says the payouts are made “to the extent practicable” meaning the education funds are the last chunk doled out.
Based on numbers from the State Lottery Commission, including preliminary numbers for the fiscal year that just ended, the lottery has transferred more than $1 billion to educational programs since it started three years ago, or about one-third of its gross tickets sales.
So a billion should pay for a lot, right?
Well, state law mandates how it can be spent.
Each year five percent goes into a reserve fund in case the lottery does not make as much money as expected, the same reserve fund Governor Perdue raided for $50 million earlier this year to help close the budget gap.
From what’s left over, 40-percent is devoted to the public school building capital fund, 10-percent is for college scholarships, and the other 50 percent is to limit class sizes in early grades and fund the More at Four program.
So how much, if any of that money may be able to fill in cuts school districts are making, like staff and transportation?
We’ll find out tomorrow.
North Carolina’s lottery appears to be more efficient than the Palmetto State.
In its first two full years, the South Carolina lottery has transferred just 30-percent of the money its made to educational programs.
Story summary image
More: continued here