State Lottery Is No Big Win for Education

They were buying tickets for the California state lottery this week at the rate of 1,250 a second, drawn by a record jackpot of $67 million.

But don’t think that this is just gambling. It’s a state lottery, with the money going for a good cause--public education. As some of the early lottery ads put it, “Our schools win too.”

Even before the lottery began in 1985, however, California’s superintendent of public instruction Bill Honig was saying, “I wouldn’t bet on it.” Four years later, the lottery was pulling in $2.6 billion a year, 39% of it, or $1.04 billion, earmarked for education. But state education officials say the gain is offset by cuts in legislative funding. Many schools, expecting individual allotments, are getting nothing because school districts are appropriating the money to cover their budget deficits.

Lotteries have historically been an accepted way of funding everything from public works to private colleges, although they have periodically fallen into disgrace. Now, since New Hampshire instituted its state lottery in the mid-1960s, lotteries have been proposed in almost all 50 states, and 32 states plus the District of Columbia have them. Some form multistate lotteries, knowing, says Paul Dworin, editor of New York-based Gaming & Wagering Business magazine, that “a lot of people will only play when the stakes are huge.”

Lotteries appeal to taxpayers and legislators alike as a way of raising money without raising taxes. Actually, gambling of all kinds seems appealing now. With annual gambling revenues estimated at almost $250 billion, the $15 billion from state lotteries is just a small but significant part.

Indeed, this is gambling, justified by the cause and the assumed governmental controls. Some states put money into general funds. Two-thirds have targeted specific funds--public education, senior citizens (Pennsylvania), parks (Colorado), economic development (Oregon), even a fund for treatment of problem gambling (Iowa). Most give half the winnings to winners, 35% to 40% to the state fund, and up to 15% to the cost of operation (administration, marketing, retailer commissions).

State lotteries do have detractors, often on moral grounds, and not just church lobbies (whose objection may include competitive concern for their own lucrative bingo games and Las Vegas nights). Lotteries also offend the American work ethic, being an undeserving, unproductive, thoughtless, effortless way to make (not earn) money.

Furthermore, linking gambling to education, say critics, makes gambling acceptable, even commendable, to the nation’s children. It’s touted as good, clean fun, and anyone can play. “The lottery is the cheapest ticket in town,” says Dworin, “the most accessible, most benign form of gambling.” The marijuana of gambling, it could be a first step toward addiction.

Some object on grounds of fairness, saying that lottery contributions, while voluntary, are like regressive taxation. The middle class may put more money into lotteries, but the money poor people put in represents a higher percentage of their income. The burden of funding schools is unequally spread.

There are also practical problems. California’s PTA, among others, “opposed the ballot proposition on the grounds that lotteries are not a stable source of funding for education,” says Harriet Borson, the state PTA’s director of legislation. Ticket sales are unpredictable and disbursements naturally periodic, and “you don’t know how much you have,” says Borson, “till the end of each quarter.”

Nor is getting it guaranteed. New York has dedicated lottery funds to education for two decades, but the legislature simply canceled the gift when money was needed elsewhere--to fund the 1980 Winter Olympics, or just to balance the budget.

Many objections are wiped out when people think the lotteries work, i.e. raise money for the chosen goal. And they do raise money, passing over to state governments now an average of 38.5% of revenues (New York is tops at 45%).

Unfortunately, it may be just a drop in the particular bucket. California’s lottery money has never contributed more than 4% of the annual K-12 education budget. Florida’s education commissioner calculated that the lottery funds received for education in 1988-89 covered just five days of school.