Today’s round of questions, my smart-aleck replies and the real answers:
Question: The North Carolina Education Lottery seems to me a strange way to raise money for education. It doesn’t seem like something you should bet on. My guess is that the lower your income the more likely you’re going to play this lottery. What percentage of annual spending on education in North Carolina comes from the North Carolina education lottery as opposed to money allocated through the state legislature? What percentage of actual sale of lottery tickets goes to education? When considering actual dollars what kind of numbers are we talking about? Does the legislature have any say as to how this money is distributed, or does that come through the Department of Public Instruction? What kind of money flows into the Asheville and Buncombe County School systems? Does any money go to the state university system and the community college system? If so, what does UNC Asheville get and what does A-B Tech get? Where do these actual dollars go in terms of specific educational investments and do they help raise the salaries of our poorly paid educators?
My answer: Philosophical question: If you’ve been playing the same set of “lucky numbers” in the lottery for, say, 30 years, are they actually all that lucky? Asking for a friend…
Real answer: Lottery spokesperson Van Denton noted that using lotteries to raise money for causes such as education is “common both in the U.S. and around the world.
“In the U.S., 45 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands all offer government-operated lotteries,” Denton said via email. “Around the world, government-operated lotteries exist in at least 100 countries and on every inhabited continent.”
In North Carolina, the state legislature decides where the money goes each year in the state budget.
“As allocated by the General Assembly, the money flows through education programs and benefits every county,” Denton said.
He provided this outline of how this works:
- The N.C. Department of Public Instruction administers the money raised that is allocated to school systems for support staff and school transportation, and the money that goes to each county to help build and repair schools. The school construction and repair funds are allocated to counties.
- The N.C. State Education Assistance Authority administers money raised for scholarships and grants based on financial need. Students receiving that financial aid attend state universities and community colleges, including UNC-Asheville and A-B Tech Community College. The authority produces annual reports showing the number of students with that financial aid attending each university and community college.
- The N.C. Department of Health and Human Services oversees the state’s Pre-Kindergarten program. Money raised by the lottery supports that program, too. It provides a free academic preschool to four-year-olds who are judged to be behind their peers so they can catch up before kindergarten.
In fiscal year 2022, 65 percent of lottery revenue went to prizes.
“The higher the sales, the higher the profit will be for education,” Denton said.
Another 7 percent went to retailers, as required by state law, for selling lottery tickets. Another 4 percent covered the cost of lottery operations
“The rest, a profit of 24 percent, went to the state to fund those education programs,” Denton said.
The legislature produces an annual report that shows the disbursal of lottery funds to each county. The lottery has a very detailed report on its website, too.
Denton provided this breakdown on how the $11.7 million that came back to Buncombe County in the 2022 school year was used:
- $6.9 million shared by county, city and charter schools for school staff.
- $342,028 to support school transportation.
- $2.3 million to help build, repair and renovate schools.
- $1 million to provide a free year in a Pre-K class to 177 four-year-olds.
- $819,665 to scholarships, including for students at Asheville-Buncombe Tech and at UNC-Asheville, and $207,323 for financial aid to students attending state universities such as UNC-A.
- Scholarship awards went to 605 Buncombe County students, and financial aid grants, funded partially by the lottery, went to 905 more Buncombe County students.
The N.C. Education Lottery website notes that Buncombe has received $147.7 million in lottery funding from March 30, 2006 through June 30, 2022.
Buncombe County Schools spokesperson Stacia Harris referred me to the lottery website but also provided some information on county schools.
“Buncombe County Schools may apply for a certain amount of lottery funds to cover construction projects,” Harris said via email. “The funding is based on an NC Lottery Formula.”
Harris said BCS can apply for about $400,000 each quarter for construction and capital improvements.
“The N.C. Department of Public Instruction manages the funds, and we submit an application — based on need — to acquire those funds,” Harris said. “Lottery funds cannot be used for technology, salaries, or central office needs.”
UNC-Asheville’s Director of University Communication Hannah Epperson said the lottery’s report is the best source for information
“As we understand it, the vast majority of the proceeds goes to K-12 schools, but some lottery proceeds for higher education are primarily dedicated to scholarships and grants administered through the State Education Assistance Authority,” Epperson said.
I was unable to connect with Asheville City Schools or A-B Tech on this one.
Public Schools First NC, a nonpartisan, nonprofit focused solely on pre-K–12 public education issues, also has a lot of lottery information on its website, noting the state lottery was created in 2005 with an original provision that 35 percent of lottery proceeds had to go to education.
“In 2007, the legislature changed this requirement to a guideline,” the nonprofit states. “There is no legislation safeguarding lottery funds for strictly educational purposes. Today, less than 26 percent of lottery revenue is allocated to education spending.”
The remainder “goes to prize money, retailer compensation, and other expenses.” Public Schools First NC also notes that in in fiscal year 2021, the lottery generated $936 million to support education programs in North Carolina.
“Originally, the lottery legislation included a statement that revenues from the lottery should serve as a supplement to existing state funding, rather than a substitute,” the nonprofit states. “However, this passage was removed just before voting, creating the possibility for legislators to use lottery revenues as a replacement for state funding.”
Critics argue that lottery money just replaces state funding instead of supplementing it.
“It is difficult to know whether the lottery has actually increased education funding because we do not know what would have happened with education funding if the lottery did not exist,” Public Schools First NC states.
The nonprofit also offers this statistic, which really shows how much money goes to education in this state: “Even if the lottery gave 100 percent of its revenue to schools, that would only cover about 19 percent of the state’s total budget for K-12 public schools.”
And even with that, “Many educational resources remain poorly funded or not funded at all,” the nonprofit states.
Got a question? Send it to John Boyle at jboyle@avlwatchdog.org or 828-337-0941.
Lottery revenues are a tax on stupidity.