WRAL Investigates

Lottery is replacement, not addition in school budgets

Posted May 10, 2010
Updated January 20, 2012

N.C. Education Lottery

— Lorene May says she plays the North Carolina lottery for fun, but she also expects some of her dollars to go to education. With school budgets being cut, May said she worries where her money is going.

“The whole thing of the lottery is supposed to be for education, and they're still coming back with such a shortage. I believe the money has been misspent like a lot of our other tax dollars,” she said.

See a breakdown of where the lottery money goes.

When state lawmakers passed the lottery in 2005, they promised that the money would not replace tax dollars meant for education, but analysis of the numbers shows that is exactly what has been happening.

While the lottery meets its revenue raising goals, cuts elsewhere in the state budget mean the stream of funding for education has continued a downward trend.

A look at the general fund education allotment since the lottery was established shows  spending slowly increased, but the actual percentage of the general fund allotted to education has dropped.

“Money is moved around. We don't know how much money North Carolina would spend if we didn't have the lottery,” said longtime lottery critic Chris Fitzsimon, who is with government watchdog group N.C. Policy Watch.

“The devastating effect is that convinces people around the state that education is funded,” he added.

The lottery's net proceeds account for just 4 percent of North Carolina's total public school spending. After prizes and administrative costs, 35 cents of each dollar spent on tickets goes toward pre-kindergarten programs, reducing public school class sizes, college scholarships and school construction.

“I don't think we've ever seen the lottery as a game changer. We've seen it as: this is a nice addition to our portfolio,” said Wake County Debt Manager Nicole Kreiser.

Kreiser says Wake County's annual construction allotment, about $10 million this year, covers less than half of the cost of an elementary school. Lottery money helped build the new Herbert Akins Elementary in Fuquay-Varina.

The problem, she says, is that state leaders pulled back corporate tax receipts that were also going to build schools.

“It's essentially gone and we've been left with the lottery, so that may be a supplant issue,” Kreiser said.

It’s the same issue for lottery money directed to reduce class size. About $100 million pays for approximately 2,000 teachers. That allotment helps maintain student-to-teacher ratios in kindergarten through third grade based on state statute, but not reduce class size. Plus, budget cuts elsewhere are increasing class sizes in higher grades.

Samantha Cibelli, a recent Meredith College graduate, is one of more than 31,000 North Carolina students who received lottery scholarships this academic year – on average, $1,200 per student per year. It can't replace tax money because lottery dollars created the scholarship.

“It's helping on some accounts. I'm here. I can say I've been helped by the lottery,” Cibelli said. “I appreciate that, and I'm sure everyone else who receives it feels similarly.”

90 Comments

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  • whistler411 May 14, 1:59 p.m.

    Judge Manning is a joke. He expects teachers to find ways to serve students who sit and talk in class, show up late consistently, do not complete assignments that have been given to them. Teachers hands are tied to those types of things, but I bet if someone walks into Judge Mannings court and portrays the same behavior, he has some type of rememdy - it's called contempt of court and jail time. Stop dumping on teachers and schools Judge Manning until you give us the resources to remove the problems so that we can reach the students who are their to receive an education. As horrible as it sounds, everyone is NOT entitled to a free public education if their behavior habitually illustrates that they do not want it.

  • almagayle50 May 13, 9:40 a.m.

    And where does all the money that Harris Teeter sends to our schools go?

  • Delacroix May 11, 3:38 p.m.

    So are they going to change the name of the lottery and take out the "Education" tag, or will the state just continue with this lie hoping not too many people follow the news?

  • chance May 11, 3:37 p.m.

    "How about we change NC's official motto from "To be, rather than to seem" ("Esse Quam Videri")

    to "We rob from Peter to pay Paul" ("Nos spolio ex Peter ut persolvo Paul)"

    How about "We rob from Peter AND Paul to line our own pockets and live the good life while our constituents stuggle"

  • chance May 11, 3:34 p.m.

    PLENTY COUPS said "Honestly as the article states, the lottery money is going for education. Unfortunately, the lottery money replaced previous spending in the education budget to make up for shortfalls elsewhere. The money has to come from somewhere."

    FLASHBACK to 2005: So let's say we didn't have the lottery, that it never passed. Do you HONESTLY think they would appropriate the same amount of tax funds they currently have for Education? The answer to that is NO. They would be forced to budget the proper amount of taxes. So, in theory, since the Education Lottery was SUPPOSED to be in addition to tax funds, we should have the same amount of tax funds budgeted for Education REGARDLESS as to whether we have lottery money or not. The lottery money is NOT supposed to be used to make up shortfalls. And I really don't want to hear how the same amount of tax money would be appropriated and Education would be even worse off because THAT WOULD BE A FLAT OUT LIE!

  • JayJay May 11, 2:39 p.m.

    I agree with others here. The lottery should be a 100% bonus money for the school systems. They should continue to be fully funded without any consideration for the lottery. It was supposed to IMPROVE our schools, not replace traditional funding sources.

  • Chapel Hill Conservative May 11, 2:14 p.m.

    How about we change NC's official motto from "To be, rather than to seem" ("Esse Quam Videri")

    to "We rob from Peter to pay Paul" ("Nos spolio ex Peter ut persolvo Paul)

  • DeathRow-IFeelYourPain-NOT May 11, 1:28 p.m.

    REV. RB: "They lured us into believing this would all go for education and it would raise the conventional budgets previously set for education."

    You mean to say they lured many of you. I was NEVER lured. I can honestly put my hand on a Bible and state that I have NEVER purchased a lottery ticket in my many decades of life. I also knew about the "shifting of money" before the lottery was ever passed. Many others preached about this before it was passed. But the masses were lead like thoughtless sheep. People always complain about the religious sector. Actually, the religious sector is about the only ones with their heads screwed on right.

  • Plenty Coups May 11, 1:25 p.m.

    Honestly as the article states, the lottery money is going for education. Unfortunately, the lottery money replaced previous spending in the education budget to make up for shortfalls elsewhere. The money has to come from somewhere.

  • Finz Up May 11, 1:13 p.m.

    It's funny......For some reason I don't see any of the "house" GOLO libs hammering what is an obvious mismanagement of funds. Funds built on a lie to begin with that are a blatant tax on the poor. They must be busy bashing the private sector on another topic and calling for "regulation". Regulation is king to a lib as the government gets another free pass.

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