Why Is It Still Called the Education Lottery?

Why Is It STILL Called the Education Lottery?

Gary West

Greenwood School District 50

February 28, 2004

WEB EXCLUSIVE: At the end of this article, see additional notes resulting from questions and comments from other readers.

Last year, I detailed the facts that K-12 public schools in South Carolina were not benefiting as much from the South Carolina Education Lottery as the general public believed at that time¹. Many school districts were being asked what they were planning to do with the windfall dollars that they were to receive from the lottery. The folks who raised that question were surprised to see the numbers from the lottery website²– showing that only 3.8% of lottery revenues were going to K‑12 public schools while 7% of those revenues were going to gas stations and convenience stores for selling the tickets.

Now, almost fourteen months later, it’s time to re-assess the impact of the “education lottery” on K-12 education.

Before looking specifically at the lottery dollars, let’s look at what has happened to K-12 public schools in other areas over the last three years (the lottery is now in its third year):

SC K-12 public schools have had budget reductions in excess of $372 million³ since the end of the 2000-2001 school year,
SC K-12 public schools must meet new achievement requirements under the No Child Left Behind (NCLB) Act⁴ of 2001,
SC K-12 public schools continue to work toward requirements of the Education Accountability Act⁵ (EAA) of 1998,
SC K-12 public schools’ state per pupil expenditure has decreased from $2002 to $1777 (-11.2%)⁶.

During that same period, the SC Education Lottery has had total revenues of $1.8 billion (with a “b”). By the end of June 2004, South Carolina’s K-12 public schools will have received approximately $73.3 million – about 4.1% of the total lottery revenues – that’s four cents out of every lottery dollar. (See Table 1 for the source information for these numbers and the numbers in the following paragraphs, unless otherwise footnoted).

So – since July 2001, K-12 public schools have lost $372 million in state revenues and gained $73.3 million in lottery money – for a net loss of almost $300 million.

During that same time, South Carolina’s gas stations and convenience stores will have received approximately $126.2 million – or 7% of the total lottery revenues. During that same time, USC, Clemson, and MUSC will have received more than $60 million dollars to hire additional professors, the state’s four-year colleges will have gotten more than $105 million in tuitions from students (while raising their tuitions to historic levels), and the two-year technical colleges will have gotten more than $77 million in tuition assistance from students.

By its own calculation⁷, the lottery website indicates that the Education Lottery Account (the account set up for the lottery money that goes to education) has received 29% of the total lottery revenues since January 2002.

Quoting from a widely circulated lottery brochure⁸, legislators, lottery representatives, and the Governor’s office, contend that K-12 public schools are getting as much as 34% of lottery money designated for education in 2003-2004. The brochure lists under “Lottery Funded K-12 Programs” such non-instructional items as (1) new school buses (which should actually be paid for from the state’s regular budget instead of the lottery money⁹⁾, (2) teacher training grants (money that goes to colleges so teachers can take college courses), and (3) the administrative costs of implementing the requirements of the EAA (money for use in “impaired” districts and other “extra” programs required by EAA and which should come from the EAA legislation instead of the lottery legislation¹⁰).

K-12 public schools are getting just $40 million from the lottery in 2003-2004 (that’s 14% of the amount placed in the Education Lottery Account – not 34%). And even that money is restricted by the Legislature for specific programs in grades K through 5. There are no lottery funds at all for grades 6 through 12 or for regular programs in grades K through 5.

In reality, since January 2002, South Carolina’s K-12 public schools are getting only 4.1% of all lottery revenues – or, about 14% of the lottery money designated for “education.” Table 1 uses data currently found on the lottery website¹¹ to detail the appropriations made for each lottery year so far.

TABLE 1: SC Education Lottery 2002-2004¹²		Distribution of Lottery Dollars				Pct of Revenue	Pct of Ed. Account
TABLE 1: SC Education Lottery 2002-2004¹²		2002	2003	2004¹³	Totals	Pct of Revenue	Pct of Ed. Account
Total Revenues		$337,149,060	$726,912,112	$743,944,367	$1,808,005,539	100.0%
Appropriations: Operations	Operations	$25,630,203	$41,753,831	$44,636,662	$112,020,696	6.2%	Not Ed.
	Prizes	$200,310,497	$414,683,229	$431,487,733	$1,046,481,459	57.9%	Not Ed.
	*Gas Stations/Conv. Stores/Retailers*	*$23,486,957*	*$50,700,663*	*$52,076,106*	*$126,263,726*	*7.0%*	Not Ed.
Education Account Deposits		$87,721,403	$219,774,389	$215,003,683	$522,499,475	28.9%	100.0%
Appropriations: Higher Education, Libraries, SCETV, School Buses, and the Education Accountability Act	Unappropriated Revenues¹⁴	$7,721,403	$47,774,389	$0	$55,495,792	3.1%	10.6%
	LIFE, HOPE, Palmetto Scholarships	$3,000,000	$50,800,000	$51,500,000	$105,300,000	5.8%	20.2%
	State Tuition Grants/Assistance	$3,000,000	$34,000,000	$40,000,000	$77,000,000	4.3%	14.7%
	National Guard Scholarships	$0	$1,500,000	$1,500,000	$3,000,000	0.2%	0.6%
	Endowed Chairs at USC, MUSC, CU	$0	$30,200,000	$30,000,000	$60,200,000	3.3%	11.5%
	Teacher Grant Program	$2,000,000	$0	$2,000,000	$4,000,000	0.2%	0.8%
	College Technology	$10,600,000	$11,100,000	$12,000,000	$33,700,000	1.9%	6.4%
	SCSU Technology Grant	$1,000,000	$2,000,000	$3,000,000	$6,000,000	0.3%	1.1%
	Ed Accountability Act Administration¹⁵	$23,500,000	$0	$22,503,683	$46,003,683	2.5%	8.8%
	New School Buses¹⁶	$15,000,000	$8,000,000	$8,000,000	$31,000,000	1.7%	5.9%
	SCETV Digitization Project	$18,500,000	$0	$0	$18,500,000	1.0%	3.5%
	Aid to Local Libraries	$0	$1,500,000	$1,500,000	$3,000,000	0.2%	0.6%
	Black Colleges/Excell. Enhance.	$3,000,000	$0	$3,000,000	$6,000,000	0.3%	1.1%
*Appropriations: Regular K-12 Instruction***	K-12 Programs (K-5 only)	$400,000	$32,900,000	$40,000,000	$73,300,000	4.1%	14.0%
	K-12 Class Size Reducation	$0	$0	$0	$0	0.0%	0.0%
	K-12 Supplies & Materials	$0	$0	$0	$0	0.0%	0.0%
	K-12 Textbooks	$0	$0	$0	$0	0.0%	0.0%
	K-12 Technology	$0	$0	$0	$0	0.0%	0.0%
	K-12 EAA Instructional Resources	$0	$0	$0	$0	0.0%	0.0%
	K-12 Facilities	$0	$0	$0	$0	0.0%	0.0%
	Grade 6-12 Instruction	$0	$0	$0	$0	0.0%	0.0%
	Pre-K Programs & Resources	$0	$0	$0	$0	0.0%	0.0%
	Dropout Prevention Resources	$0	$0	$0	$0	0.0%	0.0%
	Safe Schools Resources	$0	$0	$0	$0	0.0%	0.0%
	NCLB Instructional Requirements	$0	$0	$0	$0	0.0%	0.0%
	*TOTAL K-12 Regular Instruction*	*$400,000*	*$32,900,000*	*$40,000,000*	*$73,300,000*	*4.1%*	*14.0%*

Pct of Revenue = Total for 2002-2004 on that line divided by the total revenue ($1,808,005,539) for 2002-2004.

Pct of Ed. Account = Total for 2002-2004 on that line divided by the total Education Account Deposit ($522,499,475) for 2002-2004.

Table 1 shows distribution of “education lottery” funds between January 2002 (when the lottery began) and June 2004 (the ending date of the current appropriations by the Legislature). The red italicized data compare K-12 public school lottery funding to the lottery funding for gas stations and convenience stores.

Since the lottery started, the gas stations and convenience stores have gotten almost $53 million more lottery dollars than have South Carolina’s K-12 public schools.

So, why is it still called the “education lottery”?

As you consider the answers to that question, you might want to consider the following questions, as well:

How many of the students entering four-year colleges as first-year students with lottery scholarships of any kind are still in college long enough to start their third year? Is that percentage better or worse than the overall graduation rates for the state’s colleges and universities (about 55% graduate through six years¹⁷)? What percent of the lottery scholarships are “lost” because students don’t maintain their grades or leave college before graduation? What impact will tuition assistance have for South Carolina’s two-year technical colleges, which have graduation rates around 15%?¹⁸
I’m the parent of a college student who entered her first year in the Fall 2002. She qualified for a lottery scholarship. Why did her tuition go up exactly the amount of her lottery scholarship? Why are the colleges getting the lottery money and raising tuition – so that the families of college students are seeing no reduction in their college costs?
I’m also the parent of a high school student who will graduate in the Spring 2004. She is taking a college-credit course through one of the state’s technical colleges. My daughter will never set foot on the technical college’s campus. The technical college required her to file for her lottery tuition assistance money (although she’s still in high school) and the technical college received that money. Yet, the technical college provides no instructor, no materials, no textbooks, no classroom, and no other resources for the course. All costs for the course are still borne by the high school – although the technical college got the lottery tuition money. Why can’t these lottery tuition dollars be used to offset the costs at the high school for providing the course, instead of going to the technical college? Is this process just a windfall for the technical colleges who are taking the money and giving college credit for high school courses? Are students taking these high school courses for technical college credit also counted in enrollment statistics to get additional state dollars from other budget sources?
The Legislature’s lottery appropriations between 2002 and 2004 include a total of $31 million for school buses and more than $46 million for administration of the Education Accountability Act. School buses have always been funded from the regular state budget and the EAA was passed in 1998. The lottery legislation, passed in 2001, states that “the net proceeds must be used to supplement, not supplant, existing resources for educational purposes and programs.”²⁰ In other words, the lottery money that goes into the education account cannot be used to pay for things already required for education – like school buses and the EAA. Why, then, has the Legislature appropriated more than $77 million from lottery money, over three years, for school buses and the EAA – more than has been appropriated to K-12 public schools (only $73.3 million)?

And now, we come back to the point to be made. The “education lottery” has provided almost $73.3 million in restricted funds for specific K-5 programs. No lottery funds are provided for grades 6-12. Printed literature and public speeches continue to exaggerate the lottery’s impact on K-12 public schools. Current legislation requires that all unclaimed prizes and any additional revenue not in the current appropriation will go to higher education – with nothing going to K-12 education.

After a review of the facts, as taken from the lottery’s own website and the lottery legislation, the question remains: Why is it still called the “education lottery”?

About the Author

Gary West has lived in South Carolina for more than 30 years. At times, he is confused but more often confounded by South Carolina politics, which he compares to the plantation politics of the Old South – where the masters believe that only they know “The Truth” and they insist that everyone else know it exactly the same way. Mr. West has been a public school teacher, a private school teacher, a college-level instructor, a high school coach, a technology geek, and more within school systems in North and South Carolina. He has taught in the poorest districts in South Carolina and has worked in more affluent districts. He has also survived the education of two daughters and a son (if this can be described as “surviving” – and there is the nagging question about who was educated more, him or them). He writes for educational and technology journals as well as writing cathartic little pieces like this article. He wrote last year’s piece entitled “Why Not Call It the Convenience Store and Gas Station Lottery?” He supports truth in advertising. He cares about what happens to education. He is not running for office. Mr. West can be reached at garywwest@earthlink.net. This article is available online at http://home.earthlink.net/~garywwest/.

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