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Lottery Payoff Uncertain for Schools
Despite the promise of bringing in more revenue for the state's public schools, lottery money is not a bonus to schools, but just a regular part of the state's education budget.
But this year, the Education Funding Advisory Board of the cash-strapped Illinois State Board of Education presented a proposal to reform school funding statewide, and it made no mention of the lottery.
That's because the board does not expect the lottery to do much for education, said Chairman Ronald Gidwitz.
"The lottery is an artifice for raising money," he said. "It's a specious approach to funding schools."
While its profits go directly to the state's Common School Fund, the lottery does not supplement school funding, The Chicago Reporter found. The lottery is one of several pots of money that go into the fund, the account from which the state doles out money to its 224 school districts, and it does not affect the state's total education spending. Simply put, lottery money is not a bonus to schools, but just a regular part of the state's education budget.
And the funding school districts receive from the state has nothing to do with how much their communities spend on the lottery. This has a particular impact on Chicago. The share of the Common School Fund going to the Chicago Public Schools is smaller than the portion of statewide lottery ticket sales contributed by the city.
Some principals, teachers and residents in the state's highest lottery-selling areas say they can't see the benefit to their schools, which still lack many basic necessities.
"I don't know that it was ever supposed to be a supplement" to school funding, said Anne Plohr Rayhill, public relations director for the Illinois Lottery. "When the lottery started, it was to help fund the state budget in general, from what I understand."
But that isn't the way some lottery players understand it.
Yvonne Morris, who works as a technician with the Illinois Department of Human Services, spends $15 a week on lottery tickets.
"I hope the money is going to the schools, because that's what they tell us," said Morris, who is also a student at Governor's State University. "I heard on TV that the majority of the money spent on the lottery goes toward schools."
Even the lottery tickets themselves are not completely clear when it comes to explaining how much of the lottery money goes to schools.
Play slips for Pick 3, Lotto, Little Lotto and The Big Game/Mega Millions, along with machine-printed tickets, state on the back, "By law, all lottery proceeds are transferred directly into the Common School Fund." Scratch-off game tickets, like those for "Red Hot Cash" and "Winner Take All," state, "By law, net proceeds are transferred directly into the Common School Fund."
In 1972, advocates of a state-run Illinois lottery proposed that its profits could be used to fund public schools. In late 1973, after much wrangling by politicians, the Illinois General Assembly voted to establish the lottery. The first lottery tickets went on sale in July 1974, and profits from those tickets went into the state's general fund.
It wasn't until 1985 that state lawmakers passed a law directing all lottery profits to the Common School Fund. The rest of the lottery revenue covers lottery prizes, vendors' commissions and administration costs.
"To begin with, we're not talking about that much money," said Marty Oberman, a former Chicago alderman and longtime lottery opponent. "It's not like this money helps out schools all that much."
Lottery profits have never made up more than 21 percent of the state's total appropriations for primary and secondary education, according to the Illinois Bureau of the Budget.
The Reporter analyzed lottery sales and Common School Fund allocations in Illinois school districts.
While 33 percent of the state's lottery sales in fiscal year 2002 came from Chicago vendors, the Chicago Public Schools received 24 percent of the Common School Fund that year.
Lottery profits go into the school fund, which also receives money from other state sources. Each school district then gets money from the state school fund based on revenues from local property taxes. Poorer districts, with less property wealth, get more. The money school districts receive is not based on the lottery money they contribute.
"There's nothing that differentiates the –˜lottery dollars' from –˜tax dollars' or any other [school funding] sources," said 40th Ward Alderman Patrick O'Connor, chairman of the Chicago City Council's Education Committee.
"The lottery does not materially help public schools because it does not generate additional funding," said Ken Gotsch, chief financial officer of the Chicago Public Schools. "Instead, it has simply replaced state funding already in place."
When the state sets its budgets for public education, lottery money is part of the calculation, even before the amount of lottery profits is known. The education budget includes state projections of lottery profits.
But state education spending remains the same regardless of whether lottery profits meet, exceed or fall short of expectations. If lottery profits fall short, the state transfers money from other sources to make up the difference. And if the lottery exceeds projections, the state transfers less money.
As a result, the lottery does not provide additional school support money. School and lottery reform advocates call it a "shell game" that deprives public schools of needed funding.
Mike Colsch, interim director of the governor's budget office, acknowledged that the lottery funding is not a supplement to the Common School Fund.
"The lottery is one of the revenue sources for state education," he said. "And the transfer of General Fund money to the Common School Fund is driven by lottery revenues."
"I agree that the lottery dollars are part of the state budget for education," said state Sen. Donne Trotter, "but the program is not set up for those [lottery] dollars to go directly on top of the existing budget for education."
"We have this game that says all the profit coming from this lottery goes into education," he added. "But the Common School Fund has no surplus."
Trotter has repeatedly challenged the state's use of lottery profits in the last few years. His 16th District includes parts of ZIP code areas 60619 and 60628, which have the state's highest lottery sales.
In 2001 and 2002, Trotter proposed legislation that would send state money into the school fund without regard to the lottery revenue. This would effectively turn the lottery money into a supplement to school funding rather than a replacement, he said. Each time, though, Trotter's bill was referred to the Senate's Rules Committee, which never brought it up for a vote by the whole chamber.
Sen. John Cullerton, whose 6th District includes the Loop, Near North Side, Lincoln Park and Lakeview neighborhoods, is one of two Democrats on the Rules Committee. He said a Republican governor and a Republican majority in the Senate keep the Trotter bills from becoming law.
"The way it works is that the Rules Committee is controlled by the majority party," he said. "They decide whether a proposal ever goes to a vote. That's the power they have."
Lisa Sims, spokesperson for Senate President James "Pate" Philip, said making lottery a supplement to school funding would require that money be taken from other programs.
"Unless the Democrats have another way to replace the money in the budget," she said, "those bills would not have worked."
And, while school and lottery officials were aware of how the state uses lottery money to fund schools, few were willing to share their views about it.
"I have some personal opinions," said Gidwitz, "but from an official position, my concern is that we get money, not how it's generated. If someone is interested in my opinion, I will express it to the proper authorities."
The Illinois Lottery's Rayhill would not say whether the lottery money should supplement school funding.
"The legislature and the governor allocate it, [and] we hand it over," said Rayhill. "We don't tell them how to allocate it and we don't tell them what to do with it."
"I have my own personal opinion," she added, "but I do not want to question the governor."
Some teachers, parents and school officials don't believe the lottery helps education. They point to needs in their schools as evidence.
Arthur Dixon Elementary School, at 8306 S. St. Lawrence Ave., is among several schools found in the 60619 ZIP code area, the lottery's highest-selling area in the state in fiscal year 2002, with more than $23 million in sales.
Principal Joan Dameron Crisler said the school could use extra money to add on to Dixon, where all of the students are black and two-thirds qualify for free or reduced-price lunches. She said her school needs larger classrooms and space for computer and science labs, a theater and a photo or video production studio.
"We keep it in great shape, but it's a 1929 building," she said.
Just south of 60619 and second to it in lottery sales was the 60628 ZIP code area, which includes Pullman and most of Riverdale, Roseland and West Pullman. It is 94 percent black, with a per capita income of $16,735, according to the census. In fiscal year 2002, lottery sales there approached $21 million.
"You would think that we would get some of that money," said Catherine Boganey, a member of the Local School Council at Edgar Allen Poe Classical Elementary School, 10538 S. Langley Ave. "I'm disappointed. We have to struggle to get computers in the school, and to get our kids field trips."
The councils are 11-member boards of teachers, parents and residents who oversee the budget and other policies at each of the city's schools.
Pat Daley, a teacher at nearby Countee Cullen Elementary School, 10650 S. Eberhart Ave., said it needs money to reduce class sizes and improve computer access. Cullen is 100 percent black.
"I had [a classroom with] 30 kids this past year," Daley said. "I would have loved to have had 20. My school has not been connected to the Internet, although [administrators] talk about it."
With more than $1 million in lottery sales in 2002, one of the most successful lottery retailers in 60628 is 115th Street Food & Liquor, between South Stewart Avenue and South Halsted Street.
The lottery and liquor counters greet shoppers just inside the store. In the moments before the midday drawing on a September afternoon, customers gathered near the lottery counter, their talk and laughter mixing with the high-pitch buzzing of the lottery machine.
Retired teacher's aide and grandmother Maxine Claudio said that she spends about $50 a week on lottery tickets.
"I don't believe that most of it goes where they say it goes," she said of the lottery revenue. "As much money as the lottery makes, I don't see the teachers getting better pay."
Since the lottery's contributions to the Common School Fund are mixed with tax dollars and other revenue, it's hard to tell exactly how the lottery aids schools.
"I often hear parents say, –˜I bought a lottery ticket today, so I contributed to the school,'" said Daley, a member of the Chicago Board of Education in 1991 and 1992. "But the truth is, you can't trace a lottery dollar to a school."
Meanwhile, school leaders from the 60619 and 60628 areas feel that lottery proceeds should be distributed to schools in the neighborhoods where lottery tickets were sold.
"If the money can't go to communities in proportion, that's a little off," Boganey said.
"We should be getting a commensurate return on those dollars," said Crisler.
O'Connor, whose North Side ward does not include any of the state's top-selling areas, said it would be "incomprehensible" and "inappropriate" to distribute the lottery revenues that way.
"Rewarding those communities that generate the most lottery ticket revenue makes no sense at all," he said.
"Essentially, what it means is that neighborhoods that gamble more get better school services, and I don't think that was the intention of the [lottery] legislation. I would prefer to overhaul school funding sources overall, rather than relying on the lottery."
Gotsch of the Chicago Public Schools does not dismiss the idea.
"If they want to apportion lottery revenues according to sales, that's up to them," he said. "Our goal is simply to increase funding because the state isn't doing enough. We're 48th in the country in terms of state funding for education."