Did schools win state lottery?

by CalWatchdog Staff | February 25, 2010 1:59 pm

Feb. 25, 2010


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.

Source URL: https://calwatchdog.com/2010/02/25/new-did-schools-win-state-lottery/