Date: March 6, 2019
By: Ling Ling Chang
Source: Cal Matters
We recognize education as a great equalizer. It provides opportunity for all children of any economic class to have a chance at success.
That is one of the main reasons voters created a California State Lottery in 1984 — to provide an ongoing means of additional money to benefit schools. Ballot language stated the Lottery would send “at least 34%” of every dollar to public schools.
In 2010, in the midst of the Great Recession, the Legislature relaxed that requirement, allowing the Lottery to provide bigger prize payouts figuring that would increase lottery sales, ultimately providing more money to schools. With the change came the directive to set prize payout amounts in such a way as to ensure providing the maximum possible funding to education.
Sadly, no “jackpot joy” ensued, at least not for schools.
Last year I wanted to determine funding for computer science programs. During that research, it was puzzling that the numbers from the Lottery weren’t adding up. After analyzing profits and expenditures, it became clear that while revenues for the Lottery were skyrocketing, funds for schools remained flat.
Since 2010, Lottery revenue has more than doubled; its funding to schools has not. In 2010 revenues were about $3 billion, and about $1 billion was sent to schools. Fast forward to 2018, and the Lottery took in about $7 billion, yet schools received $1.7 billion from the lottery.
Further, years of back-to-back public scandals have demonstrated the Lottery is rife with nepotism and wasteful spending, and every dollar wasted at the Lottery is money that doesn’t go to a classroom.
I called for an independent audit. It was clear we needed to review the growing disparity between the Lottery’s record-breaking revenues and its contributions to California’s public schools, as well as assess the culture at the Lottery.
A year later, and the State Auditor’s report revealed what I suspected all along; the Lottery “cannot demonstrate that its current prize payout rate is optimal for maximizing funding for education,” and it “did not adhere to a requirement to increase its funding for education proportionate to its increases in net revenue.”
The audit confirmed that while lottery sales revenue has increased by 115% since the Legislature’s changes were adopted in 2010, payments to schools increased by only 66%. It also found that for at least the 2017-18 fiscal year, the Lottery shortchanged schools $36 million.
That’s just one year. California’s Lottery seems to have been short-changing what it owes schools for at least four years.
For perspective, $36 million could have purchased 3.6 million library books. It could have supplied 200,000 Chromebooks.
The Lottery director disputes the auditor’s findings, stating that while the Lottery’s core mission is maximizing funding for education, that doesn’t mean there has to be a “direct proportional relationship” between its revenues and education funding.
The Lottery director has it wrong. Voters created the Lottery to provide a stable flow of revenue to schools. However, the Lottery has developed a culture of profits first and schools last. They are gambling with our children’s future.
To right this wrong, I have introduced legislation, Senate Bill 891, to ensure our schools get the money they are owed. My bill would regulate the Lottery school funding program. It would require the Lottery to pay education the $36 million it owes. It also would mandate that the percentage of money schools receive stays consistent as Lottery revenues grow, and that there be an audit of the program each year.
We deserve to know if the Lottery is fulfilling its mission of providing additional monies to benefit education, and our schools deserve the funds promised by the Lottery.