Is the lottery failing to live up to hype? NO !!!!!!!!!! Part One

Sun December 30, 2007

Is the lottery failing to live up to hype
By Wendy K. Kleinman
Staff Writer

The penny most people use to reveal a scratch-off is about how much of a $1 lottery ticket purchase that ends up going to public school districts.

The Oklahoma City and Tulsa school districts each receive about 1 percent of the Lottery Commission's total annual revenue. Other districts receive even less.

The money districts get is earmarked for specific purposes, education officials said.

Yet there is a common perception — which can largely be traced back to advertising when voters approved a lottery — that school accounts should be brimming with lottery profits.

With a projected shortfall in lottery funds revealed last week for this school year and for the second year in a row, state schools Superintendent Sandy Garrett wants to change the way lottery money gets to schoolchildren, so it can help public education.

How it affects schools
Financial shortfalls

The Legislature appropriates lottery money to schools during its annual budget session, based on estimates of how much money the lottery will generate.

This year, schools will get $4.6 million less than the $36.9 million that was budgeted, according to financial figures available at Thursday's meeting of the state Board of Equalization. Last year, schools were allotted $21.8 million less than the $53 million appropriated.

That cost contributed to a loss of more than a dozen teaching positions in Enid last year, school district spokeswoman Amber Fitzgerald said.

Lottery funds last year were given to districts to help pay for the $3,000 teacher pay raise mandated by the Legislature.

But in Enid, the lottery money paid for about 30 percent of that pay raise. As a result of the shortfall, the local board of education had to cut $1.6 million from teacher's salaries and elsewhere to come up with enough funds, Fitzgerald said. That cost the district about 20 teachers.

The shortfall was not the sole reason for the cuts, but it was a factor, she said.

Garrett will ask the state Board of Education at its January meeting to OK a request for supplemental funding from the Legislature to cover the shortfall, she said Thursday.

Money tied up

A $10 million bond issue to build an elementary school and make other infrastructure improvements in Enid failed in mid-December. District officials received questions about why lottery money wasn't being used for those improvements, Fitzgerald said, even though that would be illegal.

"The perception probably comes from the campaign to pass the lottery when we had the state question,” said Shawn Hime, an assistant superintendent at the state Education Department.

"Most of (the advertising includes) young children, so it makes you think the money is going to young children, while only 45 percent of it is,” Hime said.

That's 45 percent out of the 30 to 35 percent of the lottery's annual revenue that goes into the Oklahoma Education Lottery Trust Fund. The rest of the lottery's revenue goes to prizes, lottery operations and other expenses.

From the trust fund, 45 percent goes to prekindergarten through 12th-grade education; 5 percent to a school consolidation fund; and 5 percent to a teacher retirement fund. The Legislature divides the rest among higher education, technical centers and schools for the blind and deaf.

The portion that goes to secondary education must be divided among more than 500 districts in the state.

How it could be changed
What lottery officials want

Beginning with the 2008-2009 school year, lottery officials must turn over at least 35 percent of profits to the education trust fund. The current minimum is 30 percent.

But the greater the percentage of money that must go to education, the less there is to put into prizes, and Oklahoma already has the lowest payout of any state, said Rollo Redburn, the commission's director of administration.

What the Lottery Commission wants to do is make prizes worth more, which it expects to result in more sales. Therefore, even though a smaller percentage of profits would go to schools, there would be more actual cash to give out, Redburn said.

Republican Rep. Chris Benge said he thinks the lottery's novelty has worn off. He said people here gamble at casinos.

"I don't see any real growth opportunities out there for the lottery,” said Benge, chairman of the House Appropriations and Budget Committee.

What education officials want

Garrett wants lottery funds to be distributed outside legislative appropriations.

That way, schools would not have to absorb the cost when there's a shortfall — instead, schools would receive "bonus” money. School boards also would be able to choose how to use the funds, Garrett said.