Local Politics

Budgetary raid on lottery funds raises alarm

Posted March 2, 2009
Updated March 9, 2009

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— Gov. Beverly Perdue's decision last week to pull $50 million from the Education Lottery Reserve Fund to help cover state operations has met with criticism from both lottery opponents and representatives of North Carolina's counties.

N.C. Education Lottery Education lottery money goes to budget shortfall

With the state facing a projected $2.2 billion budget deficit for the 2008-09 fiscal year, Perdue created a $300 million emergency reserve in case extra money is needed to pay for day-to-day operations until April, when corporate income tax payments are due.

In addition to the lottery fund, she allocated $100 million each from the Clean Water Management Trust Fund and the Public School Building Capital Fund and $50 million from the Public School Textbook Fund to the emergency reserve.

"It is a bit of a breach of good faith with the public," said Bob Orr, a former state Supreme Court justice who has a pending lawsuit challenging the legality of how state lawmakers approved the lottery in 2005.

Perdue, who was lieutenant governor at the time, cast the tie-breaking vote to guarantee the lottery's approval in a controversial special session of the state Senate.

Orr and other critics now point to the pledge lawmakers made in 2005 to dedicate lottery proceeds to education.

"It's one more controversy," Orr said of Perdue's recent reallocation.

Perdue, a former teacher and longtime education advocate, defended her actions, saying North Carolina is in an economic crisis.

"It's my constitutional responsibility to balance the budget, and I'm going to do that," she said. "If I need help doing it, I'm going to have to do what I have to do to make that happen."

State Treasurer Janet Cowell said she worries about Perdue robbing Peter to pay Paul.

"You're not going to get through (the budget deficit) with those sorts of short-term measures," Cowell said. "Make those hard (budgetary) decisions, as opposed to (using) duct tape and smoke and mirrors."

Cowell voted against the lottery as a senator four years ago.

Counties statewide also are worried about the move because they count on lottery funds and other state money for school construction projects, said David Thompson, executive director of the North Carolina Association of County Commissioners.

"It's a high level of concern," Thompson said.

The state held back $43.3 million from state schools last month, including $37.6 million in lottery money, he said. That included about $4.4 million from Wake County, $1 million from Durham County and $1.7 million from Cumberland County.

"I don't think anybody knew that the payments were to debt service and to ongoing construction," Thompson said.

Perdue said she supports a constitutional amendment to dedicate lottery money to education. But, she argues, she still would have the executive authority to use lottery money to balance the state budget, if needed.

"I want to pay the money back. Obviously, I do," she said. "I was assured that (the reallocation) will not affect any capital construction projects."


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  • acceptorchange Mar 3, 2009

    Why is it that so many people seem to think being poor or in the lower income bracket makes one automatically stupid? Why do some of you folks think the poor are buying all the lottery tickets while their families starve and do without? Just because one is poor does not make them stupid.

  • Here kitty kitty Mar 3, 2009

    I have not bought one lottery ticket...zero, zip zilch. If I want money to go to education I will buy something from my co-worker's child's PTA fundraiser. At least Bev can't get her hands on that money and I know where it is going!!!!

  • acceptorchange Mar 3, 2009

    Here we go again. A similar situation took place when the transportation (gas tax) fund was robbed. What does it take for a politician to keep their hands out of the til and leave the funds for that which they were intended. Cut back like us citizens have to do...or we could do like the politicians and simiply go rob our neighbor when we don't have enough.

  • montyburns Mar 3, 2009

    one of the worst things in the fall election at least for us here in NC was the straight ticket obama worshipers stuck us the bev perdue when McCrory would have been a much better option.

  • Weaker Pelosi Mar 3, 2009

    "Seems to me Perdue is making her dilike for the woman very public". I agree, but think June can take her.

  • mmania Mar 3, 2009

    This is just another stick it to June Atkinson. Seems to me Perdue is making her dilike for the woman very public.

  • NeverSurrender Mar 3, 2009

    "NeverSurrender - you are absolutely right. I grew up in FL and I strongly opposed an "education lottery" here in NC."


    I wasn't opposed to a lottery here in North Carolina...no matter how badly the politicians may spend the lottery proceeds, I'd still rather they capture and spend the tax upon the mathematically ignorant here in North Carolina rather than have that money go over the border to our neighbours (no offence to our neighbours but we've got plenty of problems at home).

    I merely objected to the fantasy promulgated by the politicians that somehow education was going to be saved as a result of lottery revenue.

    Like I said, I lived in Florida...I knew better. At the height of lottery funding, it was enough to pay for seven of the 180 school days of the year.

    After five years, the politicians didn't even bother pretending it'd help education significantly. The least Bev could do is be honest that she's filching lottery funds and be done with it.

  • bobbythreesticks Mar 3, 2009

    Instead of posting here, spend 42 cents and write a letter to the Governor's office to let her know just how you feel. I put my letter in the mail yesterday afternoon.

  • schoonie79 Mar 3, 2009

    NeverSurrender - you are absolutely right. I grew up in FL and I strongly opposed an "education lottery" here in NC. It really was only a matter of time before this happened. If I remember right, FL started to withhold funding for the schools stating that the schools get enough from the lottery so the state doesn't need to contribute or something like that. It really is a shame that our kids' education isn't higher on the priority list of where to spend money. I hope Gov. Perdue doesn't think she's fooling anyone. That money will never get paid back. It never did in FL.

  • paise Mar 3, 2009

    NeverSurrender: I got the information from the NC Public Education Director at the time when I needed information on testing procedures. It applied for ADD, ADHD, and AIG testing procedures. You might want to give the NC Education Director for NC, not the local but the state person in charge a call. Also, contact your congressman and have him/her get involved as well. They are great when it comes to getting involved in the education process with someone in their voting district. I've gone to Etheridge for years for assistance on various matters. His office has been of the utmost help through the years for me as well as many friends and family members on issues of education and even disability claims. Whatever the need, Etheridge helped where he had authority and at times where he didn't.