Monday, June 15, 2009

Lottery: 'Where does the money go?'

One reader had a sharp reaction to my Sunday column asking "What were they thinking?" She wanted to know: "Where does the money go?"

The column was about former Gov. Mike Easley and his arranging a job for his wife at N.C. State University, a process that has led to the resignation or firing of four people, including Mary Easley. The column mentioned problems related to the adoption of the state lottery in 2005.

The reader wrote:

One of the paragraphs in your "What were they thinking?" article in today's Observer really jumped at me.

"(The remarkable thing is that the N.C. Education Lottery, created in such sleazy fashion, has evidently been well-run and without the corruption that has marked N.C. government in the 21st century.)"

"IF it's been so well, run why are our schools in such dreadful financial condition? The supposed purpose of the lottery was to benefit the schools. And from the millions of dollars they advertise are waiting to be given away, when and where are the schools benefiting???? Seems to me that folks at the Observer are in a good place to start finding some answers. There is NO EXCUSE for teachers and programs to be getting terminated for lack of funds when the lottery is so full of money.
"I, for one, and probably lots of teachers, principals, parents, and students would be VERY interested in some sensible answers. Please tell us WHERE IS THE MONEY GOING???????"

It's a good question, and there's an easy answer. The N.C. Education Lottery Web site posts an annual report on where the money goes. Here's a link. The report shows that since inception, $725 million has gone to education; in 2008, $350 million went to education.

The money, by law, is split among school construction, college scholarships, class size reduction and programs for at-risk children.

I wasn't a supporter of the lottery and the way the legislature adopted it wasn't pretty, but my point in the column was that it appears to be well-run and is producing revenue for schools.


Anonymous said...

one place is where the governor sends it (not to education either). got a feeling the lottery money replaced money used by the democrats to treat their supporters...bunch of theives & scum in Raleigh

Anonymous said...

I have seen numerous comments in the past that denigrated the money that the lottery collected simply because it didn't actually meet the lofty expectations first created when they were trying to get the lottery started. So what? If the lottery didn't exist, we'd be that much further in the red than we are now. People ought to be glad to have the income the lottery does provide.

What other form of government fund raising is completely optional? What tax does the state collect that I can opt out of if I choose? What other form of revenue creation does the state engage in that creates no complaints from those who do the actual funding? There are none.

Quit yer bitching.

Anonymous said...

Again, where is the money going???? the state of Georgia seems to be the role model for a education lottery. But, as of yet, I have not met a single student recieving any NC lottery funds. Furthermore, my spouse is a tenured professor at UNCC who is taking a pay check and our benefits have been shredded. So, where is the money going?

What, exactly, are Ms. Easley's qualifications for a university position (besides being married to the Governor)? Perhaps I have missed this. While the tenured, PhD-holding professors are taking pay cuts and losing benefits, she gets a multi-year contact at a salary of $140,000 a year! Please!

Anonymous said...

A big waste of money!

Andrew said...

In a lot of states, and I suspect it's not very different here, the lottery funds end up replacing the original funding sources rather than supplementing them. The tax money that used to go to schools gets replaced by lottery funds, so the newly-found 'surplus' is spent on something else.

If lottery proceeds go down, then the schools hurt. It's a terrible idea to use something like the lottery (not at all a guaranteed source of income) to fund education, but it's what happens.

Graham said...

A reporter should check into how lottery funds are being spent under the Beverly Perdue administration.

It's possible that it's being dipped into so that projects other than education can be funded.

Anonymous said...

325 million seems like a lot of money and it is, as a lump sum. Start breaking that down by school district, school, and programs and you see how quickly that number shrinks. Any is helpful, but most people see the lump sum not the broken down amount.

John said...

As I recall, Meck residents rejected the first couple of school related bond issues proposed immediately after the lottery was passed. That's generally been the typical result of "education" lotteries, both the voters and the politicians use the lottery to excuse cutting or not increasing funding to schools. I have yet to see a state lottery which actually INCREASED school funding. Many studies have shown that funding typically remains relatively flat after the adoption of a lottery.

Anonymous said...

It probably goes to the gays...they get everything

Anonymous said...

People who play the lottery are stupid.

Matt said...

I agree with the request to break these #'s down into which school districts are getting what. Why is it so difficult to let the public know the details of anything anymore? There seems to be a multi-level culture where those in the know (i.e. government officials and the like) only tell the common public on a need to know basis. And what they tell us is just enough to satisfy part of the questions.

I'm not claiming to know what its like to be a senator or a governor but I would love to find out why we're only given 1/2 of the story when we are all starving for the full truth about important items that affect all of us.

Anonymous said...


Michael said...
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Julia said...

Where does it go? In your pockets when you win. Thats why I use for lottery scratch offs

Michael said...

The crap that was pulled to get the lottery passed here in NC was shady at best.

I've seen a couple of studies and several news reports that detail how the poor play the lottery more often, spending a much greater share of their disposable income than better off participants.

Being basically a libertarian, I really like to leave people alone and let them do what they want, and if they make bad decisions *they* should be the ones who suffer the consquences. I shouldn't pay for someone who makes bad decisions or just plain stupidity. I also fill the same about all these government bailouts. Companies should be allowed to fail and we should have never *rewarded* failure.

Anyway, I am a firm believer in personal responsibility, and sure those that play should just simply walk away if they can't afford it. But, in the case of lotteries, I think their impact upon the poor and their communities is so bad that they should not be allowed. I especially feel that the government should not be participating in an activity that preys upon the poor. Every dollar folks spend on the lottery is a dollar that goes to government and many times that money does not go where it's supposed to, where it was promised to go when first passed.
All those dollars are dollars that could be saved, paid a bill or spent in the local community.

I am not a religious man, and my objection to lotteries is not based on that or god.
But, lotteries are an insidious scheme that really amounts to a regressive tax, done to fill the troughs of government pigs.

Of course, there are idiots out there who like to say if the lottery didn't exist, then the government would be further in debt. That's just ignorant. Never, no matter what- the government will not be able to satisfy its apetite for our money and they will spend it. We need to stop allowing the government to come up with ways to take our money and demand they find ways to cut the money they "need'. Also, some of the money that is spent on lottery tickets could have instead been spent at a businesses and sales tax would have been collected. So, it's not accurate that all the money the lottery has collected would be lost if not for the lottery. That's not the real point anyway- the governments from local up to federal, need to stop taking so much of our money.

There's really no way to say this nicely- if you play the lottery, you are being real stupid. You are voluntarily giving the government even more of your money, and that's stupid. It really is.

Here's a major story done by a newspaper in Chicago. Please, click the link and read the entire article. It is ironic that many of those who push for lotteries are dingleberry liberals, and in many cases it is their constituency that has been bled dry by these lotteries. The desperation many poor people fill is what drives them. Yes, it not smart but those who passed these lotteries should have known about human nature. Of course, the politicians probably counted on that desperation part of human nature. That's a shame.

Read the article, please.
Illinois Lottery: The Poor Play More


Anonymous said...

11,442,907.56 / 224 employees = 51,084.40875

Take a look at the average wage per employee of the Lottery. I don’t have time to figure out the average wage of a teacher, but I am pretty sure it is not $51K.

I have one question: Why do people still play across the border in surrounding states?

Answer: The other states have an 8%-12% better chance of winning on their ticket. This is bad marketing and strategy by the state.

So, the lottery players before it was passed used to drive across the border to get their tickets. They still do because they have a better chance of winning. All the lottery has done is created a tax for the government and hope in the hearts of the poor. If you look at the counties and the average income of these counties, you will see that the poorer counties spend more on the lottery than other counties per person living in those counties.

50% of the money goes to the 3 largest counties, Wake, Guilford and Mecklenburg.

Please read the following studies:

If you go to the search feature of the site and type in the Education Lottery you will find many articles written.

Steve said...

I guess "well run" means no lottery official has gone to jail recently.

As for people going across state lines to buy tickets, yes, marketing has something to do with that. But gas price probably is just as much of a factor. When you drive to SC to buy gas, if you want lottery tickets, you'll buy them while you're there. "Everybody else is doing it" was a big reason they said we needed a lottery (as if that one worked on their moms better than it did on mine). What that really meant is that there would be competition. They said NC money was going out of state. Now we send more to the company that runs it in RI and to multi-state winners than was going to SC, VA, and TN before.

The GA lottery is held up as an example, but somehow using the poor to pay for college for rich and middle class students seems hardly fair. Originally, the poor were not eligible for GA lottery scholarship money at all, but that has been modified. And even before we had a lottery, NC was giving more aid to students attending private colleges than was GA with their lottery. A few years ago I did see that 18 GA lottery officials split $8 million in bonuses.

I don't know where most of the NC lottery money goes. I do recall from a few years back that states without "education" lotteries spent more per student on K-12 than did states that had them. As for the construction funds, both Mecklenburg and Gaston Counties use them to pay toward some old bonds and not for new construction as promised. I don't know about other counties, but I wouldn't be surprised if many do the same.

Even before the first ticket was sold, Easley had plans to divert about $200,000, so don't blame Bev for doing something new. We can blame her for casting the deciding vote in the state senate to pass the lottery. She was party to the vote that was not only unethical, but also unconstitutional, as half of the state supreme court agrees. I took that as a bad sign of her integrity level.

eda said...
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Anonymous said...
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Anonymous said...

As for those of you who are cynical of the GA lottery, do not be. I used to live there, and I attended college on the HOPE scholarship. It is very simple to get, you make a 3.0 or better in high school, you fill out a one page form, and you have the scholarship. If you have a GED they give you $1500 towards the first 36 hours of your education at a junior college, then you qualify for HOPE based on having a 3.0 in college. The same applies if you graduated out of state (military, boarding school, divorce, etc.) Anyway, there is no income limitations whatsoever on this scholarship (high or low)The only reason that it appears that low income students do not receive "HOPE" money is that they take federal PELL first, then use "HOPE" to cover the rest. The GA lottery paid my tuition and fees to GA Tech with a book allowance of up to $500 a semester. Please before you insult one of only a few good things GA has ever done, and the only well run lottery, do some research. Also, my nephew attended the "headstart"(pre-k)program in GA, which is free to any household making less than 35k (with one child, it goes up from there) which is also funded by their lottery. Do you how GA does this? They made a state law when they started the lottery that made it a FELONY to use the lottery money for anything but those two programs. It has served them quite well.

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Nick said...


Interesting article. I don’t think playing the lottery has to be stupid. This view leaves out the value we get from the benefit of anticipation, which can be real pleasure as well. The question is: is the value of anticipation greater than the "cost of disappointment” (from not winning) and the “value of money to play in lottery” combined?

I recently had a more detailed look at it:“are-lottery-players-stupid”

Lottery Tickets Guide said...

Nice Post. Thanks for sharing this information with us. A reporter should check into how Lottery funds are being spent under the Beverly Perdue administration.

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