POSTED ON JULY 11, 2007:
Little Bit, Not Much
Certainly not the lottery it was cracked up to be for education
The Oklahoma Lottery was as controversial an issue as they come when it was proposed four years ago. For all practical purposes, that controversy was settled pretty decisively by Oklahoma voters in 2004 with 64 percent approving it.
But public debate persists nonetheless, however, for the venture still hasn't quite made the grade when it comes to the educational benefits foretold by lottery proponents, according to some commentators.
"It's been disappointing so far," said state school Superintendent Sandy Garrett when asked for her thoughts on the lottery's success in benefiting public education.
"I had my hopes high, as many others did," she said.
According to the Oklahoma Lottery Education Act, 30 percent of all ticket proceeds are to be transferred into the Oklahoma Lottery Trust Fund.
From that pot, 45 percent is designated for common education, 45 percent for higher education, 5 percent for the Teachers' Retirement System and 5 percent to the School Consolidation and Assistance Fund.
Rollo Redburn, director of administration for the Oklahoma Lottery Commission, said more than $125 million in lottery proceeds has gone into the fund since the game's inception in October 2005.
Of the $206.4 million the lottery raked in during fiscal year 2006, $62.2 million went into the education pot, he said.
That figure has been surpassed so far for the duration of fiscal year 2007 that's been accounted for, though. Of the $211.2 million in lottery sales recorded through June 23, more than $63 million has been designated for education, Redburn said.
For 2008, $227.2 million is expected in lottery proceeds, of which $75.3 million will go into the education trust fund.
While that's a lot of money that wouldn't otherwise be at the disposal of Oklahoma's common and higher education institutes, Garrett said those numbers alone don't tell the whole story.
According to the law approved by voters, lottery proceeds are to supplement existing funding for education, not replace it.
That hasn't quite been the case, as Garrett sees it.
During fiscal year 2005, Garrett's department got 37.5 percent of the state budget pie.
The following year, when the lottery began, common education's share went down to 35.7 percent, and still lower for 2007 at 35.4 percent, and 35.5 percent for fiscal year 2008.
However, Garrett wouldn't go so far as to say that the Legislature violated the Lottery Act by its appropriation, since the law doesn't specify by percentage what constitutes education's existing funding.
Not only did K-12 get a smaller piece of the pie, Garrett said, but the Legislature didn't provide funding to offset the $17.5 million shortfall in lottery proceeds, which were supposed to go toward the $3,000 teacher pay raise they approved last year.
Because of the shortfall, only $1,110 of the raise was covered by lottery revenue, Garrett said, leaving schools to cut into existing funding to pay the remaining $1,890, as well as peripheral costs.
Last year's shortfall in lottery proceeds was just the first, though.
The Lottery Commission recently revised its estimates for fiscal year 2007 sales by $29 million less than previously projected.
Late last year, they estimated $243.7 million in sales, but had to tweak that down to $214.6 million in late June as the end of the fiscal year fast approached with only $211.2 million to show for it.
Jim Scroggins, executive director of the Lottery Commission, said they could beef up sales if the Legislature let them devote more of the proceeds to prizes but, with only so much money to go around, they'd have to put less in the education pot to do it.
Garrett said she suspects lottery sales are lower than expected because of unforeseen competition from Indian gaming, which also helps fund education.
Also, while common education's share of the state budgetary pie is smaller than before, the pie itself is larger, which means schools are still getting a bigger piece of pie than previously.
While she'd like to see more money in the classroom as a result of lottery ticket sales, Garrett, a Democrat, said she still supports the lottery.
"The Governor was right to put it on the table, and we were a state that debated having the lottery before and we didn't know what to expect out of it," she said.
However, Garrett said she'd like to see lottery funds coming to education on a separate check from general appropriations.
"That way it would be clear to citizens about where their lottery money is going," she said.
Meanwhile, lottery critics from across the aisle are sounding off with their "I told you so!"'s and calling for a repeal.
"The lottery chickens are coming home to roost," said Tom Daxon recently when he was still chairman of the Oklahoma Republican Party.
(Gary Jones was recently elected to the seat.)
"We now know that the $300 million in painless education revenues waved in front of voters by Governor Henry and then-Finance Director Scott Meacham was a gross over-estimation, and major financial and social ills are cropping up as a result. Today we know the Henry ticket is a loser," Daxon also said, in response to lowered lottery revenue projections.
The "social ills" he mentioned are an increase in gambling and debt he said the lottery helped create.
Daxon pointed to an Oklahoma Bankers Association poll, according to which almost 80 percent of rural bankers reported higher non-sufficient funds problems since the lottery's inception, which Daxon and other Republicans blame on an increase in gambling fueled by the lottery.
"It's time for us to recognize as a state that Governor Henry's lottery is a failure," he said.
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