Is The Lottery Shortchanging Schools?

CBS News Investigates How Much Education Lottery Money Is Actually Going To Schools

(CBS)  By CBS Chief Investigative Correspondent Armen Keteyian and producer Phil Hirschkorn.

Americans gamble over $54 billion a year on lotteries, and a majority of the 42 states that run lotteries claim the games increase funding for education. But a CBS News investigation has found that most of the lottery sales never make it to a classroom.

After 50 cents of every gambled lottery dollar is given back in prize money and operating expenses swallow another 20 cents, on average, leaving just 30 cents of every lottery dollar going back to the state.
Lotteries do help, but not nearly as much at you may think. Even when proceeds are earmarked for education, lotteries generally cover only a fraction of state education spending.

For example, in Illinois, where the state spends $6.5 billion a year on education, only $619 million, or one-tenth, comes from the lottery. In California, with an $84 billion education budget, the lottery funds only about $1.2 billion, or one-seventieth. In Florida, lottery proceeds cover one-twentieth of state education spending. In New Jersey, it's one-thirtieth; in Texas, one-fiftieth.

"We thought that it would be a windfall" says Michael Johnson, executive director of the Illinois Association of School Boards. He says the idea that lottery money adds to education funding is a myth.
"The general public -- they were fooled by this,” he says. “The belief that that's additional money, above and beyond what we would normally get, that's the part that's not true."

"Well, it's certainly one of the worst votes I ever made," says former Illinois State Senator Dawn Netsch.

Netsch, whose vote helped pass the Illinois lottery in the 1970s, says lottery money simply replaces tax dollars legislators might spend on education, but instead spend on other projects.

"The lottery becomes part of the big pot of money that funds the basic functions of state government," Netsch said.

In Florida, where lottery proceeds are a billion dollars a year, spending per pupil…has dropped nine spots from 37th to 46th in the nation since voters approved a lottery 20 years ago.

"It was sold to the public as an enhancement to the current revenue stream, says longtime Palm Beach County School Superintendent Arthur Johnson. “It was a replacement to existing dollars that diminished over time."

In fact, our investigation of government spending in the 24 states that dedicate lottery funds for education yields a stunningly bad report card. The percentage of state spending on education is down or flat in 21 of those states from coast to coast.

Down, for example, in the following states: Washington (-6 percent), New York (-5 percent), Missouri (-4 percent). It's down 3 percent in Florida, Illinois, Ohio, and Michigan and Oregon. Texas is down by one percent.

It's up in only three states -- New Hampshire (+4 percent), Georgia (+ 4 percent) and Tennessee (+2 percent).

"Lottery dollars are revenues that the states would not have otherwise,” says Tennessee Lottery president Rebecca Hargrove.

Hargrove has run the lottery in Illinois, Florida, Georgia, and now, Tennessee. She argues things would be even worse without lotteries, and that they are more popular than raising taxes.

"What you'd have to know, which is impossible for you to know, is how many dollars education would have gotten if there weren't lottery dollars,” says Hargrove. “Once a lottery passes, there are added dollars to the bigger pie.”

In Tennessee and Georgia, lotteries do fund something new, the HOPE Scholarship, which subsidizes tuition for kids who maintain a B average in high school and stay in state for college. But the scholarship program is the exception, not the rule, when it comes to lotteries and education.

In Florida, former governor Lawton Childs, once called the lottery 'A great hoax on the people.”

"The lottery's job is to raise as many dollars as possible, as responsibly as possible,” says Hargrove. “It's the public policymaker's job, be they legislators or governors, to determine how those dollars are spent."

This year, as he floated a proposal to privatize his state’s lottery, Illinois Govenor Rod Blagovich called the lottery a “shell game.” Dawn Netsh, who now teaches at Northwestern Law School, agrees.

"Many people, at least, still think of the lottery as being sort of an add-on, a supplement," says Netsch. "It never was that. It was a shell game from the beginning."

A game, it appears, in which the big winners are not in the classroom.

[pejm]

Your piece on the ineffectiveness of state lotteries to adequately meet the promise to underwrite public education was as inadequate -- in some aspects -- as you purport state lotteries to be.

Where was the background on total lottery revenues versus operating expenses and winner payouts?

Where was the background on how legislators have supposedly bled off tax dollars to be replaced by lottery funds income, and were there connections between legislative lottery supporters and pork barrel windfalls created for these same legislators?

Air time constrictions aside, major news stories should be a whole lot more multi-level and comprehensive in content than the undernourished information snack you served up on this story.

[djclifton-2009]

The story about lotteries indicates that education funds supplied from lotteries are merely a shell game whereby lottery money simply replaces other planned tax dollars for education. I agree this is the case in most states (you referred specifically to education cuts in Florida); however, with the Bright Futures Scholarship Program in Florida, that is NOT the case. Three of our children have received scholarships as a result of lottery funding for education in Florida and hopefully our youngest will receive the scholarship beginning School Year 2008/9. The Bright Futures scholarship program (http://www.floridastudentfinancialaid.org/ssfad/bf/) is an achievement-based scholarship funded by the lottery. Through this program, two of our children have received 100% tuition paid (plus $600/year for miscellaneous expenses) and one is receiving 75% tuition paid (which converts to 100% tuition when attending a community college). Although I am not in favor of the lottery, contrary to the report, this program is a direct benefit to Florida Education -- not part of the "shell game".

[GRPDiver]

And who is surprised by this?

[toolmangler-2009]

How many times have your taxes been raised to improve the schools. How about Gasoline (fuel) taxes to build or improve the roads and highways. Now we have had a lottery rammed down our throats for the schools and we are being targeted for ''Toll Roads'' next it will be statewide gambling, then maybe prostitution. See!! the ''Money Tree'' never stops growing, does it....

[brianbwb-2009]

So it is not being used for its'' stated purpose? OK, let us nail the ones who said it would be to the walls of the crumbling schools they neglected, and stuff their backsides with wads of Bush''s vouchers.

[r38658]

I really do not understand what the fuss about lottery revenue vs. school funding is.

Lottery is like voluntary tax, and buyers are willingly to purchase, some people drive hundereds of miles away to another state to purchase with hope of winning big money.

Lotteries do provide funding for state education, percentage of contribution depends on each state.

Without contribution from lottery proceeds, taxes have to be imposed, or state programs have to be cut, including education programs.

I have not heard any popular alternative ideas to replace lottery funding.

There is not a single state, as far as I know, cancel the lottery program after state started.

[tnt1954]

embezzlement of tax monies?

[zak8956]

As a California resident I''m really happy that $1.2 billion are used for schools from lottery revenues. This is $100 per year for every household in CA! I don''t play lottery, and I love it.

I don''t see the whole logic in the article. It''s an absolute win-win situation, people love playing lottery, and schools like to get the money.

As for the question what percentage of lottery revenues are used for education, it''s 34% in CA, 54% go to pay the winners, and the remaining 12% are operating expenses and retailer margins. This sounds reasonable.

[blackbug99]

Lotteries aren''t the problem. Politicians with extra dollars to spend are the problem. Heaven forbid we ever get those surplus tax dollars back. Nope, just like a kid at the mall, if you give a politician an extra dollar, he spends it. 10Million to the school budget in lotto funds is 10million tax dollars freed for a road. So, in essence, a lottery is a voluntary tax where at least a few of us get something back. I''m much happier plunking my tax $1 down for a chance at some outrageous sum of money, which will ruin my life and make me unhappy, than I am just watching my tax bill skyrocket.

[kaiyo4u]

You mean the government hasn''t provided truth in advertising? (sarcasm)

[Krazcarl]

I play the lottery but not to further education or know anyone that does for that reason. It was an excuse to get it through. Here in Ga. appears to have done some good. Politicians misapropiating funds is this news.

[gmcnally2]

Best Description of the Lottery

''Moron Tax''

[cyberus-2009]

Lotteries are a shell game, as mentioned rather than addding to education budgets it simply allows the pols to spend the money on pork.
And to add insult to injury if people look close, they say "all lottery *profits* go to education" ... profits that seem to be getting lower as the advertising budget and administration budget keeps rising.

[gunnerv1]

Ya can''t lose if ya don''t play!

[bret_hansen]

The lottery is a tax on the poorest people, because they are the majority of the players.

It is a Tax on the math impaired

[oleander8]

Lottery''s never would have come into being if they hadn''t sold the public by claiming the money would go for education - it was 100% scam. So public schools still struggle for financing, and our kids come out of college owing 10''s of thousands of dollars to financial institutions.

[unaguy32]

Good comments by Pejem, alexksj1 and Blackburg99! You haven''t done anything until you tell what percentage of the take goes to education! I play the lottery almost every week. It is my belief that education is helped by the lottery, but I never thought it was all the funding or anywhere near the funding needed. The percentages alexksj1 quoted for California sound reasonable to me. Actually, I''ll confess; when I play i''m usually thinking more of how great it would be to win, not how much I''m helping education.

[Krazcarl]

If your interested the first lottery in this country was to finace the revolution to avoid taxation. Like gunnerv1 says if you don''t like it don''t play.

[starleo146]

Who is getting most of it? why not a audit posted in the paper and lets just see where it goes every 6 months or even monthly . They take in a many of a dollar and if the politicians are in fact getting it and it is not going to education we will all know This should be done from every state that takes 1$ in for the lottery there certainly should be some accountability for this money

[whispyseas]

'' ... as much as i love to see all the naked girls dance get well soon feed the world songs all over the trails and streets and playing first aid on the trail, i love even more, much much more, seeing the big dressed men with the badges and bombs and guns and bullet proof vests dancing get sick soon tax the world songs all over the trails and streets and playing first strike on the trail as they chase the naked girls this way and chase them that way screaming all the while, get dressed you dirty ******, get dressed, this is going to hurt me alot more than it hurts you, don''t make me treat you like some kind of two year old, behave yourselfs, there''s no such thing as charity and non taxation ... ''

[Krazcarl]

whispyseas I never thought I''d encounter such a brain dead with fair grasp of the english langusge but you need another blog not the news I know this is the only one you know how to get on but search here your a joke and look drug addicted and people skip you so your still in obscerity.

[arnoldbowers]

THE LOTtERY, in the mid 60''s here in Texas they told us to vote for the 2% sales tax and it would never get larger tha the orginal 2% to day we are told that due to the fact we voted for the 2% tax the cities and counties can now charges us what ever they with and it is 8 1/4 in the cities and about 7 /1/2 in the counties unless the country officers wish and they can and do charge the additional penny.
i recall w;hen Ann Richard came in and told us all the lottery monies except the amount paid out to the winners would go to the school and then came the screming IDIOT gw bush and he took it away. Today less than 20% is going to the permant school funds and the remaining 30 is to advertisement and the most recently approved "r. perry toll roads" which (is his retirement investment) and the lottery.
Gee how some politicians steal and get away with it.
the best of good byes, frank bowers of Austin, TX

[michellem99-2009]

crzmeat that right it was. Learnt that in school. I don''t play it. Today they blow their money on it thinking yer going to win the big one and they don''t. Can''t lose if yer don''t play. They can''t stop at one ticket.. They whine over the fact they blew their cash..and the stores will take it..There in business to make money.. The person buying the ticket need to have common sense. They spend let''s say $10. They spend that and walk away. That''s using yer head.

[whatadeal1]

This story didn''t give me any other facts. Like how much total income does a lottery bring in and how much is spent on administrating. How much is given out for winnings. What if nobody played the lottery for a month, da. Your story was a commetary, it lacked facts. Come on CBS don''t try to mislead people.

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking,

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking,

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking,

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking.

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking,

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking.

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking,

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking.

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking.

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking.

[Krazcarl]

Oops sorry it was the site not me...

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking,

[Krazcarl]

WHATDEAL1...Thank you excellent point it gets tiring of folks tring to sound intellegent and further thier agenda, post again we need intelligent thinking,