Did schools win state lottery?

Feb. 25, 2010

By KATY GRIMES

In an effort to shore up some of the state’s record deficit, a bill heard this week would require more money from the State Lottery be spent on schools and less on lottery administration.

According to the California Lottery, 34 cents from every dollar spent on the lottery goes to the classroom. “The California Department of Education reports that on average 61 percent of lottery funds are spent on salaries and benefits for instructors, 24 percent on classroom materials such as textbooks while the remainder is spent in other areas,” according to the lottery Web site.

That works out to $132 per pupil.

The Legislative Analyst’s Office (LAO) acknowledged in a 2002 “Program Trends” report that the State Lottery contributes less than 2 percent of total school revenues per year to schools, amounting at that time to $138 per student.

California spends $9,488 per pupil. Compared to what parents are asked to contribute every year to their children’s classrooms, field trips, supplies, sporting equipment, musical instruments, books and the like, $132 annually per student from the Lottery does not cover much.

Of the approximately $3.4 billion annual lottery sales revenues, $1.2 billion is contributed to the 9 million students in California’s public schools. The remaining  lottery budget goes to administrative expenses and prizes.

Assembly Member Ann Hayashi, D-Castro Valley, has proposed AB 142, a bill requiring revenues of the state lottery to be allocated so that not less than “87 perceny of the total annual revenues of the state lottery be returned to the public, and no more than 13 percent be used for lottery expenses.”

The bill further specifies that of that 87 percent, not less than 50 percent of the total annual lottery revenues, in an amount to be determined by the commission, be returned to the public in the form of prizes.

The bill would allow the lottery to pay out more in prizes as a way to attract more lottery players, according to Hayashi. The bill requires the state to revert back to the old formulas if the change does not produce at least the same amount that schools are now getting.

In 1984 Voters passed Proposition 37 to create the California Lottery. Existing law requires that not less than 84 percent of the total annual revenues go back to the public in the form of prizes and net revenues to benefit education, and no more than 16 percent be used for administrative expenses.

Existing law also requires that 50 percent of the total annual revenues be returned in the form of prizes and 34 percent of those revenues be used in public education.

Confused yet?

Thankfully, the Milken Institute explained more succinctly: “At least 34 percent of total revenues go to public education. At least 50 percent of total revenues must be returned to lottery participants as winnings. No more than 16 percent of the total revenue is to be set aside for lottery operational costs, including staff, printing, marketing and distribution costs.”

There have been other attempts to beef up educations’ take of lottery funds. Sen. Abel Maldonado, R-Santa Maria, introduced SB 570 last year, which interestingly would have “modified the definition as to what constitutes revenues.” SB 570 died in the Senate.

In 2005-06 former Sen. Don Perata, D-Oakland, attempted to decrease the amount of lottery money to education while increasing the prize payouts. SB 329 also died in the Senate.

The many bills that did pass the Senate and Assembly tapping the lottery for specific beneficiaries include the Department of Mental Health, child development programs, the Department of Developmental Services, the Department of Youth Authority and added Hastings College of Law and the California Maritime Academy as recipients of lottery funds, all justified as “education.”

Appearing before the committee in opposition to the bill was Harold Boyd with the United Teachers of Los Angeles, who testified that he had spoken with Hayashi before the hearing and they came to an understanding, making his appearance less opposition and more of just a concern. Boyd said he and Assembly member Hayashi would continue to discuss whether or not the bill would allow funds to be shifted from education to prizes. Hayashi insisted that funds would not.

The bill needed a two-thirds vote to pass, and received unanimous support from committee members.

3 comments

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  1. EastBayLarry
    EastBayLarry 26 February, 2010, 09:38

    Trivial!
    Rather than trying to shift pennies back and forth, let’s concentrate on growing the economy so more people can afford $1 for a lotto ticket.

    Reply this comment
  2. Al Gavenas
    Al Gavenas 23 April, 2012, 19:43

    With the resent lottery prize of 640 million, What was the dollar amount of the lotery tickets sold to get the prize to this amount and what was the dollar amount of the tickets sold that actually went to the schools???

    Reply this comment
  3. Gary B
    Gary B 5 August, 2012, 22:26

    With the CA lottery being flush with cash, why is it the governor of this state is mandating a tax increase in order to curtail threats of further educational cuts; including layoffs, closures, salary decreases, furlough days for teachers AND students, etc…
    Is there a watch dog organization watching the “watch dog organization” created by the governor, to monitor the spending of this 34% of lottery revenue? It seems that there should be NO WAY our schools are going broke and in need of more cash via new taxes in order to survive.
    Something is very smelly about this and it surprises me that there are no questions, either by CA citizens, nor the CA news media, wondering where and how this 34% is actually being spent.
    Should we just arbitrarily trust the statement; “According to the California Lottery, 34 cents from every dollar spent on the lottery goes to the classroom”. How about as much as we trusted the CA Parks and Req’s departments statements that they were broke, while hiding 54 million, yes, million, dollars from the states government and it’s citizens for more than 12 years.
    We have become much too complacent with regards to trusting the people that are put (or, that we put) in place to take proper care of our finances. Not only at the state, but at the Federal levels of government.
    I will not vote yes on Prob 30, increasing taxes for more school revenue. We need to mandate that our state government work a lot harder into looking within its own wasteful spending habits and lies, before bending the backs of tax payers even more.

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