Scratch Off For Education: How Lotteries Fund Schools

Most people know that money from state lotteries and multi state lotteries goes to fund education. “A dollar and a dream” and “it’s good to play”, they tell us. But do you know how much money goes to the good cause of public education, and just where it goes in your state?

In the United States, lottery funds for education are dispersed to the state department of education. Generally they can be used for instructional programs but not for building or acquiring land for schools, or for research. Individual states vote how profits from lottery sales are to be spent – most states have most of the money go to education, some also fund parks, state economic development, and problem gambling treatment. Some states use the money to attract teachers with in service training, others to pay for better school transportation, others to fund scholarships. Generally the money is dispersed to state departments who then allocate it to local districts.

In Canada, lottery monies are dispersed to specific ministries which oversee public initiatives and community based projects. The Alberta Lottery Fund has a very impressive breakdown of the allocations of over $1 billion estimated for 2005-2006 which can be found here:

In California, $17 billion in lottery profit has been dispersed to the state’s public schools since the lottery began in 1985. Most of that has gone to K-12 schools, a little over 5% of it has gone to Cal State University System and the University of California, and community colleges have received a little over 14%. In California, 34.8 cents per dollar goes to education. The rest is spent on prizes, administration, commissions for vendors. Only about 6% is spent on running the game itself.

North Carolina recently started a lottery. Originally, the money was to be added to the state school budget. Now there is some concern that more than $200 million in lottery funds may be used to replace existing education spending. Lawmakers are still deciding that issue.

Oregon allocates approximately 63% of lottery profits to education, the rest toward natural resources and economic development. Every two years, Oregon voters approve the categories for lottery profit spending. South Carolina allocates no less than 45% of each dollar raised for the prize pool, no more than 8% for running the lottery, 7% to retailers, and the rest goes to education. In Florida, 38 cents of every lottery generated dollar goes toward education; in New Jersey that figure is approximately 36 cents.

This sounds like a lot of money, and it is – but in truth, it only makes up a very small part of state education department budgets. California may give 34.8 cents of every dollar generated by the lottery to education, and may have given 17 billion since 1985 – but that is only 2% of the Department of Education revenue for that time! In many areas, there is concern that the perception that schools are funded by lottery profits may result in voters being less willing to support local school budgets and fund much needed operational expenses which the lottery monies do not cover.

If you want to know where your state lottery money is going in your area, it is best to contact your local school board.