Gambling with Our Future: Why the Lottery Is Failing Education
March 5, 2013

If you live in a state that runs a lottery, it was no doubt presented as an opportunity to provide much-needed funding for education. Years later, with billions of dollars of lottery tickets sold, the question is “Have schools really benefited from the introduction of state-sponsored gambling?” In many states, the answer is clearly “No!”

In California, the lottery commission reports that over $1 billion goes back into schools each year with 63% supporting teacher salaries and benefits, 20% to purchase instructional materials for the classroom and 17% used so support “other programs and services.” On the surface, this sounds great, but only if this money was in addition to current levels of public funding.

Instead of using lottery funds as a supplement to existing school funding, states cut the amount they contribute to education significantly so lottery funds are not a boon, they become a baseline. In California, schools face extreme shortages, teacher layoffs and classroom cuts. This is not the dream they were sold with the promised lottery dollars!

In Virginia, the story is eerily similar. All lottery tickets purchased in the state bear the slogan “Helping Virginia’s Public Schools,” but are they? 24 years ago when the law was presented to voters, it was sold as supplemental funding to improve schools. The roughly $450 million in lottery funding that reaches the school systems is simply a replacement of funds the state has now withdrawn. That’s a bait and switch if ever I’ve seen one!

The Virginia law (in its many pages of fine print) did not pledge lottery funds to schools though, and voters were shocked to learn the money went into the general fund. This caused an uproar, and in 2000, an amendment was pushed through pledging the funds to education. 60% of the funds went into education (roughly $191 million), but then that same amount was deducted from state budgeting for schools. The other 40% went to special projects such as enhanced special education and speech therapy programs, building and repairing crumbling schools, but only for a few years. Today even that split is gone and lottery monies simply lower the state’s school obligation.

Lottery spend by state

Image source: EdWeek.org

James Roberts, a Virginia school superintendent, says, “It has replaced state general fund revenue, so you could make the case that… that money either went to transportation, prisons, higher education or to balance the budget. Who knows?”

In North Carolina, the notion that the lottery is intended to fund education has become so far from its true purpose that some lawmakers are moving to strike the word “education” from the name of the state lottery. As is, it’s called the North Carolina State Lottery, but that could soon change. When the lottery was enacted, the law read that at least 35% of funds would go to education “to the extent practicable.”

In 2007, 35% of proceeds did reach the schools, but by 2012, that number was down to 30%. Despite that more and more lottery tickets are sold each year, increasing state intake, less and less money is dedicated to education. North Carolina’s educational budget is lower now than when the lottery was implemented and, as in California, Virginia and many other states, has simply replaced funds instead of infusing more cash into education.

North Carolina education lottery

Image source: LotteryPost.com

As I wrote yesterday, increases in college costs to students and families can be attributed to cuts in state funding to schools. In most states with a lottery, public colleges are intended to be recipients of the lottery’s largesse, but it seems this is not happening.

Understandably, the recession and rampant unemployment have taken its toll on state budgets, but as the nation’s economy worsens, lottery sales statistically improve. A Cornell University study “Hitting the Jackpot or Hitting the Skids” found that when the economy nosedives, lotto sales see an uptick. Study co-author Garrick Blalock said, “Looking at historical data it is fair that there has been a trend of lottery tickets sales moving in tandem with economic conditions.”

It would be better for all students – from kindergarten through college – if lottery funds were properly dedicated to education as promised – students would have to borrow less to finance their education and the student loan crisis might not be as severe. Why are states gambling with education by misusing lottery funds?

If you have student loan debt, try Tuition.io’s free, award winning student loan management and optimization tool.