Lottery funds benefit schools

Vote “yes,” encouraged proponents of the California State Lottery Initiative in 1985. Proceeds will “provide hundreds of millions of additional dollars for public education…”

Vote “no,” argued its opponents, including a list of groups that included the PTA, the California Church Council and the California Police Chiefs Association and sheriffs of LA, San Diego, Alameda and Fresno counties, along with then-State Attorney General John Van De Kamp. “The lottery is an unstable source of funds, unreliable for improvement of regular educational programs,” they warned.

Fortunately for Fallbrook and Bonsall schools, the swell of enthusiasm generated by advertising for the lottery carried the legislation to a landslide victory. As people continue to emerge from convenience stores with a fist full of chances at wealth, the California Department of Education says “public education from kindergarten through graduate school has received more than the required minimum 34 percent.”

The lottery benefited state schools its first year. In 1985-86, they received $125.67 per student; by 2004-05 the per-student revenue was $142.03. Determining how much money a school receives is based on a student’s average daily attendance, or ADA. If a student is absent from school, funds for that student do not flow to the district for that day, nor for as long as the student is not in school. The lottery revenue for schools is based on the amount of money played by lottery ticket buyers. If fewer purchases are made, the figure drops; if more tickets are sold, the lottery revenue soars. While annual lottery revenue to schools has fluctuated modestly, it has only dipped below $100 per student three times since its inception and has been a consistent origin of income.

As a funding source for schools, it is small. Regardless of its benefit, it only provides “about one percent of the total kindergarten through grade 12 [K-12] funding… and it is a minor source that cannot be expected to provide major improvements in K-12 education,” claims the state department of education. Still, it is a welcome addition, says Jamie Klepin, Director of Finance for the Fallbrook Union High School District. “Without the lottery funding, we would probably have to cut programs.”

“Lottery revenue for FY 2006-07 for our district is projected to be $814,630, or $138 per student,” says Jim Whitlock, Assistant Superintendent, Fallbrook Union Elementary School District. Lottery revenue is approximately two percent of the district’s annual general fund revenue, slightly higher than the state average. At FUESD, lottery revenue is used to support student health services, their Campus Supervisor at Potter, a portion of the cost for their new K-6 music program and some costs of operating the De Luz Ecology Center program. Lottery funds are also used for a portion of the cost of purchasing instructional materials – a mandatory restriction based on law.

In 2000, voters passed the Cardenas Textbook Act that states one-half of statewide growth in lottery funds for education over the level set in the 1997-98 fiscal year must be allocated to school districts and community colleges for the purchase of instructional materials, thus adding restrictions to spending lottery revenue. The legislation occurred when California was experiencing a textbook shortage. Framers proposed the act to ensure a steady stream of books and other instructional materials without increasing taxes.

District administrators are prudent when budgeting for lottery revenue, however. Whitlock says, “Because lottery revenue can only be estimated, we do not count on any 2006-07 lottery [revenue] to fund programs in FY 2006-07.” At FUESD, they accumulate the revenue in one year, then budget expenditures of the prior year revenue in the subsequent year. In other words, they’re spending in 2006-07 lottery revenue collected in 2005-06. Although $800,000 is appreciated revenue, Whitlock says it “…is a very small portion of the total revenue needed to operate the district.”

At the Fallbrook Union High School District, where they are presently going through a textbook adoption cycle, their lottery revenue will enable them to purchase the state adopted books. While it may seem the school should have adequate funds for this purchase, high schools must now provide for two sets of books per student; a class set and home set, says Klepin. A single textbook currently being considered costs $75 each. All of their lottery revenue is dedicated “totally to the classrooms,” Klepin says, a decision made by the business services department at the district. Another example is the purchase of math software for the math department. Lottery revenue also enabled the high school district to provide a technical calculator for each student enrolled in calculus classes.

According to financial data provided by Wayne Jones, Assistant Superintendent of the Bonsall Union School District, they distribute their lottery revenue yet a different way. While they used $29,754 to purchase books for students and the school library, along with instructional workbooks for classroom use in the 2005-06 school year, Jones says $178,282 was allocated to teacher and classified employee salaries and fringe benefits.

All of these examples represent a reasonable cross section of spending on behalf of state schools, says Janet Finley, a consultant with the state department of education. Self determination on spending demonstrates the value of lottery revenue to schools as each school is allowed to decide how they will use it to benefit their own particular needs.