“hey, you never know”Posted: February 6, 2012
That title is the actual motto of the New York State lottery. But there are a lot of things that we do know about lotteries as revenue sources and state programs, particularly in education.
To put it mildly, funding public education with proceeds from state and interstate lotteries has its complications. To put it bluntly, it simply does not pay to fund public education with the proceeds from lotteries.
There’s the immediate moral/ethical problem when gambling — which is still considered immoral or sinful according to many religious traditions and, even if it’s not in itself seen as a sin, can lead to addiction and life-wrecking consequences for some of those who practice it — is not outlawed or routinely ignored but is accepted and even promoted by the state, with the rationale provided by the otherwise unrelated education system. (In the case of Pennsylvania, lottery proceeds are dedicated to services and programs for senior citizens, and the state lottery website includes links to both the state budget and gambling addiction resources.) And there’s the related issue of normalizing behaviors that many families do not want their children to emulate, all in the name of providing financial support for those same children’s schools, teachers, and educations.
There’s the question of priorities, when education funding from lottery sources replaces funding through appropriations from regular tax monies or, even worse, is projected to replace tax funding but falls woefully short in the end. There’s also the matter of the commercialization of state functions and the creation of a state bureaucracy to run a service which is neither truly necessary nor free of serious costs.
And there’s the perennial problem of the lottery as a regressive tax paid by those who can least afford it, with state lotteries going so far as to fight against prize programs that encourage low-income households to establish bank accounts and make regular deposits. There’s apparently also a serious case to be made for public lotteries as systems that place disproportionate burdens on communities of color and ultimately provide more fiscal support to wealthy districts.
(It’s worth emphasizing that the same criticisms — normalizing and modeling undesirable behaviors, taking money from low-SES people, state support for potentially addictive and dangerous habits, racial and economic inequities, misplaced funding priorities, and commercialization of state functions — are all equally applicable to other types of commercialization in U.S. public education, such as the incursion of brand-name vending machines and logos into hallways and of corporate fast-food retailers into school cafeterias. Commercial involvement in public schools actually has pretty meager overall benefits and high associated costs for those public districts that do allow it, contrary to the claims of its proponents.)
In practice, the proceeds of state-run lotteries are often distributed to public schools and districts in a very different manner than the public believes. Public school lottery funding in Florida is dependent upon individual school status with regard to quality ratings, as well as schools’ relative improvements in those ratings. The support-of-local-schools justification for encouraging citizens to play the lottery in Florida, then, is weak, as their children’s and neighbors’ schools won’t necessarily receive the funding that would ostensibly be coming to them under either a proportional or a need-based distribution scheme.
It’s apparent that the majority of states’ income from lotteries is used to support the games themselves, from providing the money awarded to lottery winners to administering the lottery and, perhaps most crucially, advertising the games. As the New York Times reported in 2007, even when states have established the percentages of lottery proceeds that must go into state budgets through legislation, those numbers have more often than notbeen reduced through subsequent amendments. At the same time, most states have also lifted their caps on maximum payouts to lottery winners.
Worst of all, states which adopted lotteries (mostly in the 1980s and ’90s) with the understanding that all proceeds would go to public schools have made the switch from giving districts lottery proceeds as supplemental funding to substituting lottery proceeds for regular state funding through taxes and appropriations. Studies from as early as the mid ’90s found that states that adopted lotteries actually fund their public schools at lower rates than those states that did not adopt lotteries. As those analyses preceded both the dot-com bubble and the recent recession, it’s likely that the numbers are even worse today; indeed, a 2009 report by CBS News indicated that state spending on education was lower in 21 of the 24 states that expressly directed lottery proceeds toward public education. In 2010, the Illinois Association of School Boards characterized that state’s lottery as “a smokescreen to make it appear that the state is adequately funding schools when, in fact, that is not the case”.
The solution’s pretty simple, right? Just abolish state-run lotteries, and go back to funding public schools with regular state appropriations and dedicated state and local tax proceeds.
But at this point, “regular” state funding for schools is essentially gone in many states, and current state forecasts for employment and private business, and for state and local tax receipts as a result, are dismal at best. States attempt to raise flagging lottery ticket sales by adding more games, joining multi-state lotteries, and spending more on advertising, and some state and local officials have even proposed “local lotteries” to make up for city budget shortfalls. Federal support for public education is now closely tied to a variety of unfunded mandates; meanwhile, states’ success in the Race to the Top grant competition depends upon the adoption of state policies that are expensive to implement, as well as a fast turnaround window that has left some of the winning states in danger of losing their RTTT funding due to unforeseen implementation problems.
At this point, some states may well be unable to afford the elimination of their official lotteries. Lottery proceeds are fungible elements in state budgeting games, and what was formerly a source of supplemental funding has now become a primary source for public schools. Depending upon the locale, citizens may or may not be willing to have property taxes raised in order to stabilize school funding. If states’ and localities’ dependency upon lotteries to keep budgets balanced and funds from running out is actually a form of addiction, it’s not clear whether they’ll actually need to hit bottom in order to sober up.
Hey, you never know. But we all deserve much better than that when it comes to our schools.