Mega millions for schools?
Analysis from CSBA’s Policy and Programs Department
Published: April 10, 2012
Didn’t win last month’s $640 million Mega Millions drawing? Well, at least the schools take home a prize. The three big winner tickets were sold in other states, but 29 tickets in California matched five of six numbers in the record-setting $640 million jackpot. Each ticket is worth $227,955.
More significant than the income taxes those winners will be paying is the state’s increased income from sales of lottery tickets—but those revenues provide less help for schools than many people assume.
Thanks in part to excitement around the largest-ever Mega Millions jackpot, approximately $53.8 million extra was raised for K-12 education since Jan. 25 of this year. That translates to approximately $8.67 per student in additional lottery funds that should start being apportioned to schools in July. While it certainly won’t offset all of the cuts made to local school budgets in recent years, it is nice to be getting money for a change. Even with this new money, lottery funds still make up less than 2 percent of most school district budgets.
Before you get too excited, remember that the same rules still apply. This is one-time money and will not balance your budget three years out. Likewise, half of the new money must be used for instructional materials.
According to the California Department of Education, the law authorizing the lottery requires school districts, including charter schools, to use lottery funds “exclusively for the education of pupils and students” and specifies that “no funds shall be spent for acquisition of real property, construction of facilities, financing of research, or any other non-instructional purpose.” In addition, voters passed Proposition 20, the Cardenas Textbook Act of 2000. Proposition 20 provides that, beginning in the 1998-99 fiscal year, one-half of statewide growth in lottery funds for education over the level set in the 1997-98 fiscal year must be allocated for the purchase of instructional materials.
Authorized uses break down this way:
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Non-Proposition 20: The use of non-Proposition 20 lottery funds is unrestricted. However, pursuant to Government Code Section 8880.5, LEAs must use this lottery funding exclusively for the education of pupils and may not use this revenue for the acquisition of real property, construction of facilities, financing of research, or other non-instructional purposes.
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Proposition 20: Proposition 20 lottery funding is restricted for the purchase of instructional materials as defined by California Education Code Section 60010
Last year’s per-student apportionment was approximately $114 in non-Prop 20 funds and $19.40 in Prop 20 funds for a total of $133.40 per ADA.
Current-year budget cuts of $326 per student will be offset by approximately 4 percent with this one-time income. Likewise, while it may help your cash flow, it makes only a small dent in the 30 percent of district apportionments that are deferred by the state into next year. As school districts prepare for the potential of another ongoing $370 per-student reduction if Gov. Jerry Brown’s budgeted tax initiative fails next November, we cannot reiterate enough the need to be clear to your community that these are one-time funds and will not solve the structural problem.
While many Californians still believe the lottery should have solved all of education’s financial concerns, the funding was always intended to supplement, not supplant, base state revenues. Lottery funds are counted outside the Proposition 98 guarantee.
A data function on the California State Lottery website shows the Lottery allows you to query how much each school district has received over the 20 years of lottery play in California. Remember that the numbers look big to the public, but when you divide them by the numbers of children you serve it really is just the cherry on top, not the answer to all your funding concerns. $8.67 won’t buy a new textbook.