Whenever I hear about shortfalls in our education budget my mind automatically flips to the state lottery and its promise to fund public education. Where does the money go?
And so it was again, on reading Linda Sickler’s article in the Feb 1-17 copy of Connect Savannah, “Budget crunch: School board begins discussing bleak outlook.” This time I Googled it—this is what I learned:
Revenues from the Georgia State Lottery have grown every year since its inception in 1993. Sales for 2008 totaled $3,520,000,000. Approximately 50 percent of that goes to prizes. Thirty-five percent of the remaining revenues go to education.
For fiscal 2007 the amount transferred to the State Treasury’s Lottery for Education account was $853,550,000. I couldn’t find the amount for 2008 but since revenues rose, we can assume it topped that. There is no funding for K-12 where the needs are so pressing.
Some of the money goes for capital expenditures (equipment for the schools), some goes to a preschool program for low-income children. Most of the money goes to the much lauded HOPE Scholarship Program, which is supposed to give kids a shot at higher education that they otherwise might not have been able to afford.
But in this the HOPE has failed its purpose. In practice, the people that wind up with most of the scholarships are middle and upper middle class students; those paying the lion’s share or the cost are the poor.
Maintaining the 3.0 (B) average necessary to maintain eligibility for the HOPE isn’t easy. Fifty percent of recipients drop out in their first year; 80 percent lose the scholarship before their college experience is over.
While in college most scholarship holders are tending to choose easier courses to ensure being able to make the necessary grades for continued eligibility—thus exacerbating Georgia’s shortage of doctors, nurses, engineers—the higher tech fields. Most kids are choosing the liberal arts curriculum, with its wider choice of easier courses—and less defined career paths.
In 2000 when the HOPE ran a deficit, as fast-growing new lottery projects often do, funds were diverted from the lottery’s preschool program for low-income kids. (The HOPE Scholarship is the lottery’s poster child and has been widely copied by other state lotteries.)
I don’t know if this was the only time this happened; I found it in an editorial in the Nashville Orbis, 2003, opposing the then-projected state lottery for Tennessee; it’s since been signed into law.
Although statistics say that the same number of rich people play the lottery as poor people, when the figures are examined it’s discovered that 54 percent of the lotteries’ revenues came from the top five percent of what are called “active” players.
That’s the poor working stiff ahead of you in line at the convenience store who’s betting much too large a chunk of his weekly check on the dream of escaping his bleak situation—a dream that, the odds say, won’t come true. The “active” players are very poor.
Study after study comes to “the inescapable conclusion that lotteries function as a highly regressive tax... impacting the disadvantaged far more than the privileged” (Clotfelter and Cook, policy experts on state lotteries).
It has also been found that most lottery states are diverting money from their education budget as soon as lottery funds earmarked for education become available and using the freed funds for whatever they feel is most pressing, so that the overall expenditure for education remains the same as without the lottery!
They’ll never abolish the state lotteries, although they should. The idea of raising revenues without new taxes is too attractive, especially to legislators (although all the lottery’s revenues could be matched by a less than one percent rise in the sales tax).
It looks like state lotteries are here to stay for a while. But at least we can and should improve the distribution of the gains.
It’s been suggested they might use the monies as a subsidy for all Georgia’s public institutions of higher learning, lowering tuition for everybody. That would be fairer.
But from where I sit the money could be best used just exactly where it’s NOT going— K-12—where future successful college students are made—or not.