The Inside Story of Schools and the State Lottery

Education officials in California have a love/hate relationship with the state lottery.

They’ve always loved it for its money, and all the more so during the wrenching state budget crisis. But they hate it because the money the lottery generates is erratic and unpredictable--and usually far less than the public thinks.

Voters approved an initiative in 1984 to authorize the lottery, partly because of the promise that at least 34% of its revenues would go to public schools.

In keeping that promise, the lottery has contributed about $5.3 billion to the state’s 1,009 districts since its birth in October, 1985.

That sounds like a lot, but the money gets spread around in a lot of places. For most school districts, lottery money amounts to less than 3% of the annual budget. In the Los Angeles Unified School District, it counts for 1.4%.

Of course, because cuts in education spending will be part of the new state budget, it is generally agreed that a little money is better than none.

Receiving money from the lottery comes with drawbacks, though, some local educators say.

The main problem is that lottery ticket sales are down. The effect on schools is clear: “If our sales go down, our allocation to schools will go down,” said John Schade, education liaison for the California Lottery.

In fact, lottery contributions to schools this school year may be the lowest yet. The Los Angeles County Office of Education is advising its districts to plan for about $74 per student. (The record high was $176.08 per student in the 1988-89 school year.)

Schade is optimistic about future years, though.

“We feel comfortable that our sales have bottomed out and we’re going to start to climb up now,” he said. “We’ll be advertising more this year, (we have) a new advertising agency, and some interesting games.”

Another problem is that several years’ worth of cuts in education spending are nowhere near made up for by income from the lottery.

“While we were getting the lottery funds, (Gov. George) Deukmejian was reducing our funding in other areas,” said Los Angeles school board President Leticia Quezada. “(The state) said, ‘Well, you’ve got lottery funds, so we’re going to subtract other categorical dollars from our budget.’ ”

And, as with income earned from nearly any sales-based business, projecting annual revenue is an imprecise science.

School districts have learned not to rely on estimates given by the state, and often have no solid numbers available when computing their budgets.

“It’s not a guaranteed flow of revenue, nor does it meet the expectations,” said Michael Hill, a member of the Santa Monica-Malibu school board. Due to shrinking funding, Hill said, “The schools no longer have the room to accommodate that kind of shortfall.”

These factors have led many school districts across the state to change the way they use lottery funds.

Originally, the money was earmarked for supplementary spending--extras such as enrichment programs, field trips and special books or lab equipment.

Now, some districts simply deposit lottery revenues into their general budgets to help pay for school maintenance and operation, instructional staff salaries, learning materials and other basics. After all, many local officials say, how wise is it to buy luxuries when you can’t afford the basics?

“The lottery never had a chance to really be extra money,” said Ronne Fonfa, president of the Santa Monica-Malibu Classroom Teachers’ Assn. “It came at a time when school systems were being squeezed financially, so any money they got hold of went into the general pot.”

Some people who voted for or participate in the lottery are sometimes disappointed to hear that money intended for extras goes toward teachers’ salaries and other less-glamorous fundamentals.

“The lottery has been a tremendous fraud to the public and to the voters of California,” Quezada said.

“I certainly understand that people got the impression, whether it was literally presented or not, that the lottery was going to take care of the schools and solve all their problems,” said Joanne McNab, director of public affairs for the California Lottery, referring particularly to the original “Our schools win too” advertising motto.

But Schade says that the basic mission of the lottery is still being performed.

“Our function is to raise money for public education. We have done that to the tune of $5.3 billion,” he said. “We’ve met our mandate.”