Serving Boone, Blowing Rock, Banner Elk, and other towns of the North Carolina High Country | Founded 05-05-05

Easley Leads Lottery Funding Change Effort

Story by David Anderson, Jr.

As the first year of the North Carolina Education Lottery draws to a close, Governor Mike Easley has proposed changes to the way lottery revenues will be dispersed in the coming year and to the programs that the lottery will support.

Although the lottery has contributed $220 million to education so far, total revenue for the 2006-07 fiscal year will likely fall significantly short of Easley’s $1.2 billion projection.

To compensate for this deficiency, Easley hopes to increase the percentage of lottery revenues going toward prize money next year in an effort to improve the overall sale of lottery tickets.

The original legislation that created the lottery allocated 50 percent of total revenue to prizes, 35 percent to education, 8 percent to fund the lottery administration and 7 percent to retailers. Easley’s budget proposal would effectively reduce the percentage allocated to education, bringing it down to about 29 percent.

Easley predicts that an increase in large prize offerings would boost total lottery revenue to around $1.5 billion next year, slightly increasing the actual amount available for education, despite the reduced percentage.

“Some believe the increased sales will actually bring in a substantially larger amount of revenues to the extent more funds will actually go to education,” Senator Steve Goss said. “I simply am not sure if this is true or not. I really do not believe it is possible to know until the experiment is tried. We will basically be required to wait and see the results if this proposal is implemented.”

Easley’s budget proposal also shifts the way education dollars from the lottery will be allocated, giving a significantly larger amount of funding to his More at Four program—a preschool program offering early instruction and stimulation for at-risk children—than the current legislation prescribes. Currently, 50 percent of education dollars received from the lottery go to support More at Four and to provide teachers for lower-grade classrooms. Easley’s plan would increase More at Four funding to more than 62 percent, allocating an additional $57 million to the program to add 10,000 children to the nearly 18,000 currently enrolled.

This percentage increase will come at the expense of a 24 percent reduction in school construction funds and a 23 percent reduction in a college scholarship fund created by the lottery and set to begin awarding scholarships to needy students next school year.

Easley isn’t alone in seeking changes to the still-young lottery; a slew of bills on the issue are circulating in the General Assembly, proposing changes such as offering equal funding for charter schools and revising the way funds are distributed among counties.

“My main overall concern is the capital distribution of the lottery receipts,” said Goss, who is co-sponsoring a bill that would reform the way lottery funds are dispersed. “I would like to see the distribution formula changed so the funds will be shared equally by all counties across the state.”