Lottery Blends Itself Into Virginia Culture, Still Controversial

For more than 16 years, Richmond Times-Dispatch reporter Jeff Schapiro has watched the lottery blend into Virginia's culture.

"Virginians think of it as a fairly harmless source of revenue, I think," Schapiro said.

After prize payouts and administrative costs, about 35 percent of each lottery dollar in the Commonwealth goes to kindergarten through high school public education. Last year, that totaled $408 million.

But, lottery proceeds in Virginia have not always gone to schools.

In the 1980s, the money went to a variety of state construction projects. During a budget crisis in the early 1990s, Virginia redirected the profits into its General Fund. Then, in 1999, lawmakers finally passed a constitutional amendment that dedicated proceeds to public education.

"Before that, I didn't feel that people recognized the contributions the lottery was making," Penelope Kyle, lottery executive director, said. "It was lost in that big pot called the General Fund."

Law prohibits local communities from diverting tax dollars from schools supplemented by the lottery.

Still, the benefits can be overstated, because the proceeds account for just a fraction of the overall education budget. Last year, Virginia lawmakers passed a $1.6 billion tax increase for education.

"I think one would be hard pressed to say that the lottery has resulted in massive additional contributions to education," Schapiro said.

Lobbyist Jack Knapp fought against the Virginia Lottery in the 1980s and now he warns North Carolina not to pass a lottery.

"When you put money in the lottery, you're putting it in a rat hole," he said.

Knapp argues the lottery softens Virginians' feelings about gambling and exploits people who can least afford to play.

Advertising has been another debate among supporters and opponents of a North Carolina lottery. Virginia spends $13 million a year to promote its lottery.

"Our advertising is mainly for information purposes, not to induce people to play the lottery, Kyle said.

Kyle is intrigued by North Carolina proposals that would ban ads except at stores where tickets are sold.

"It would be quite a feat for North Carolina to do that," she said. "The rest of the industry, I guarantee, will be watching."

Virginia will also be watching North Carolina for competitive reasons.

Without a lottery in their own state, Tar Heels account for an estimated 10 percent of Virginia's ticket sales -- more than $100 million each year.

The North Carolina senate included the lottery in its $17 billion budget proposal passed earlier this week. Under its proposal, the first year's proceeds would restore funds to build schools.

But a new state lottery is far from a done deal. Gov. Mike Easley has a few changes and the state House warned any changes to its lottery plan could kill it.

Many local school districts believe establishing a state lottery will help pay for new school construction. In Wake County each year, 4,000 to 5,000 new students enter school. This fall, the district will open three modular schools to deal with unanticipated growth.

School officials predict they will need 90 new schools by the year 2020 to keep up with the explosion in growth.