Local Politics

Shift in lottery funds blows holes in county budgets

Posted July 14, 2010

— Lawmakers' recent decision to move North Carolina Education Lottery funds around within the state budget to save teaching jobs has cut the amount of money available to pay for school buildings.

Moving $63 million in lottery funds helped school districts statewide avoid having to lay off a total of 1,600 teachers, but it throws county  budgets for a loop weeks before most schools begin classes for the year.

Distribution of lottery funds is based on a formula that takes into account both enrollment and the property tax rate in each district. The shift in funds for the 2010-11 fiscal year hits counties with higher tax rates harder because they would have received more money for school building expenses under the formula.

Johnston County, for example, will lose almost $2.3 million in lottery money for capital expenses, according to state estimates.

"I think frustrating and disappointment would be the two best words (to describe our situation)," Johnston County Manager Rick Hester said Wednesday.

The county has invested roughly $350 million to build, renovate and expand school buildings over the past 10 years. Much of the building boom was paid for with bonds.

"We have to make that $33 million worth of (bond) payments this fiscal year, no matter what happens," Hester said.

N.C. Education Lottery Counties lose in lottery shift

Because school systems across the state have already set their operating budgets for the coming school year, David Thompson, executive director of the North Carolina Association of County Commissioners, said some counties will have a harder time digging out of the unexpected hole than others.

Wake County, for example, loses only $101,835 because of the lottery funds shift. Meanwhile, Cumberland County loses $3.6 million, Durham County loses $2.2 million and Orange County loses $1.3 million.

"The real concern is, what does this mean for the future? Can we count on the lottery funds for school construction?" Thompson said.

Many counties will likely have to postpone school construction projects or find other cuts so they can make their bond payments, he said.

Johnston County officials said they aren't sure how they will balance their budget, but they don't anticipate job losses or tax increases.

"We did not think that on July 14 we'd already be in the process of trying to figure out how to recoup $2 million somewhere," Hester said.


This story is closed for comments.

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  • jlhpcarew Jul 15, 2010

    Maybe if they got rid of the administrative jobs (3 principals, 6 vice principals, 20 guidance counselors, etc.)they would have enough to pay the people teachers, the ones that actually do the hard job!!!! Is is any wonder why teachers get into administration as quick as possible - better pay and you don't have to deal with the kids.

  • NoFreakinWay Jul 15, 2010

    is there still a hole blown in it today? the only way they'll survive next year's budget disaster in waiting is to close many schools completely down.

  • weasel2 Jul 15, 2010

    Spare the rod spoil the child, anyone remember that saying? If they go back to more discipline in the schools and hold the parents accountable for their childs education. They wouldn't need 14 teachers in a class room for 12 children.

  • notpc567 Jul 15, 2010

    www.terracycle.com. The local schools need to look into this. If the state can't support our schools maybe some trash collections can help make up the difference. Sad that it could come to this but it's worth a shot.

  • dlnorri Jul 15, 2010

    Remember the lottery is a tax on the poor to pay the rich, Lottery math as promised: 50% to administrators (rich), 50% to advertisers (rich), if there is any left over the winners can have some, and if there is any more left over it can go to the schools. No wonder Easly and Black took so much money and corrupted the state legislature to get this in place. Now when some government officials kids spends four years of drunk partying at a liberal arts college, his dad (or mom) can get him/her a six figure job in the lottery business.

  • miketroll3572 Jul 15, 2010

    And thats why I never have and never will play the lottery. Boycott the lottery and send a message!

  • fishon Jul 15, 2010

    Schools don't vote for and support democrats while teachers and teachers unions do...

  • kenshi Jul 15, 2010

    Dare107, the article doesn't say Lottery money is taken away from schools, it has been redistributed to teachers salaries instead of buildings.

  • SaveEnergyMan Jul 15, 2010

    This is how gov't operates. Balance your budget by pushing it off to someone else downstream. The feds did it to the states (Medicare & unfunded mandates), the states are now doing it to the counties and the counties will have to raise taxes to cope. The counties will be the bad guys, when the real problem is higher up.

    Wake is in good shape because of their large tax base - they don't get much lottery money being a "rich" county. The smaller counties are using that construction money to pay off bonds they issued to build schools. They are seriously stuck because of the smaller tax base and taxes are going way up.

  • Duke _Nukem Jul 15, 2010

    Now get ready for the teachers to complain about the class sizes, poor building conditions and not enough funding for supplies.