Raleigh, N.C. — The state lottery could pay out bigger prizes and would have fuzzier guidelines for other spending if lawmakers approve the $20 billion state budget.

Gov. Mike Easley pushed for bigger payouts in recent months, saying it would spur sagging sales in the state-run numbers game.

The lottery generated sales of $889.3 million in the fiscal year that ended June 30. That was about 25 percent less than the $1.2 billion in ticket sales projected for the lottery's first full year.

The lower sales meant the lottery sent less money to North Carolina school districts. The lottery produced $313 million in education funds during the fiscal year, less than the $425 million legislators had projected when they wrote the 2006-07 state budget.

By law, the lottery is supposed to provide school districts with 35 percent of its revenue. Easley said that rule doesn't provide enough to encourage people to play.

"Percentages are one thing, but I have to have dollars. I can't spend percentages. I can spend dollars," he said. "What they're doing with this lottery language is allowing us to bring in more dollars."

Easley predicted that bigger payouts would bring in about $350 million for schools in the coming year.

Under the language in the proposed state budget, lottery commissioners would start following funding guidelines instead of the hard-and-fast rules they were given when the lottery was approved two years ago.

Some lawmakers said that could open the door to more advertising.

"I'm not sure what we want to do is give the lottery commission more discretion," Senate Minority Leader Phil Berger, R-Guilford, said.

Easley said the lottery's advertising spending wouldn't change under the new budget.

Lawmakers said they want to retain control over any other changes in the lottery, however.

"I just want to make sure that the decisions on the lottery remain in the General Assembly and that any changes get a wide debate and are vetted," said Sen. Janet Cowell, D-Wake.