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Lottery Misconceptions Making Long Odds on School Tax Votes

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"Wasn't the lottery supposed to take care of this?"

The question, recently put to a Florida school official trying to drum up support for a local tax levy, is one that has educators in a number of states scrambling to fight the public's impression that they are sitting on a jackpot of lottery cash.

So worried are some school districts and state education agencies that they are waging their own public-relations campaigns to counter misconceptions about how much they receive from lottery proceeds and6where the money goes.

Nine of the 28 states with legal lotteries designate public schools as the beneficiaries of lottery profits. But school officials contend that their cut has been far from the financial bonanza that was promised.

Voters, apparently convinced that school coffers are flush with ticket proceeds, are rejecting bond issues and operating levies for schools.

And that public misunderstanding continues to be fed, educators contend, by the day-in and day-out lottery promotions touting million-dollar jackpots.

"We know we have to change. We're losing the public-relations war and we believe that will translate into lost dollars for education," said David Voss, spokesman for the Florida Education Department.

Florida earmarks lottery profits for education, as do California, Illinois, Michigan, Montana, New Hampshire, New Jersey, New York, and Ohio.

In most cases, the lottery profits provide only 3 percent to 7 percent of the public schools' total revenue.

"There has been a misunderstanding that the lottery covered a good portion of education expenses," said William L. Phillis, Ohio's assistant superintendent for public instruction. "It's been difficult for school administrators and local board members to explain that additional levies are needed."

On Nov. 8, 223 of Ohio's 738 school districts will submit operating levies and bond issues to their voters. If past experience is any guide, at least half of them will fail and some of the blame will be placed on the lottery.

During a special election Aug. 2, only 14 of 70 levy proposals were passed, the lowest approval rate in 13 years, officials said.

To try to counter the problem, Ohio Lottery officials in August published 1.5 million brochures saying: "Question: When will Ohio Lottery profits eliminate the need for local support of education in Ohio? Answer: Never!."

The brochure marked an intensification of the efforts by lottery officials for the past three years to dislodge the education-bonanza notion from the public's mind. The officials had long since stopped promoting the lottery as a way to aid education and had run a series of radio and television commercials with that message. And this year it also delayed the announcement of profit distributions until after levy elections.

But in the face of the public's apparently stubborn disbelief, Ronald Nabakowski, the lottery's director, has taken to the airwaves himself to insist that the lottery provides only 6 percent of Ohio's education budget. Even so, Mr. Nabakowski said he was not sure what impact his commercial would have.

"People want to vote against levies, just as superintendents want someone to blame," said Mr. Nabakowski. The lottery, he said, provides both with an excuse.

He said the state's marketing survey indicated that only 15 percent of the people might vote against a levy because of the lottery. But he added that he is convinced the confusion plays a part in deciding close elections.

In Florida, three of four bond issues in the past year have been defeated, prompting education officials to consider developing an advertising strategy similar to Ohio's that would help voters understand the impact of lottery profits.

Dade County was the only district able to convince voters to approve a bond issue for a record-breaking $950 million.

"The lottery did make selling our bond issue more difficult," said James Fleming, associate superintendent for Dade County schools. "I think we did not win by a larger margin because of perceptions about the lottery."

Dade officials presented the bond issue not long after the lottery was launched last year, Mr. Fleming pointed out, adding that it would be even more difficult to pass a bond issue today.

During the bond-issue campaign, school officials produced a 28-minute video outlining why they needed the bond funds and how they would be spent. A segment of the video also talked about the lottery and explained the proceeds could not be used for capital improvements, according to Mr. Fleming.

And more than 30 speakers who championed the bond issue before various civic and social groups also were briefed extensively on the lottery.

Despite all those efforts, Mr. Fleming said, about a week before the election, his own 25-year-old son, "turned to me and said, 'Dad, wasn't the lottery supposed to take care of this?"'

Betty Castor, Florida's education commissioner, plans to attack the lottery problem by developing a state blueprint for spending lottery proceeds and devising a plan for informing the public about the amount schools receive and where it goes, according to Mr. Voss of the education department.

Public misunderstanding about Florida's year-old lottery has been fueled by the state's record-breaking $55-million jackpot, he said, even though Ms. Castor held a series of news conferences explaining that the $300 million in profits would operate schools for six days.

"Suddenly, the public felt hoodwinked," said Mr. Voss. "It wasn't that they received new information--they just felt deceived." He said the massive advertising budget of the lottery apparently led residents to believe all of education's financial needs would be met with lottery profits.

In a state that spends billions on education, explained Mr. Voss, "it's very difficult for people to put into perspective the funding for education."

In California, Superintendent of Pulbic Instruction Bill Honig has also held a series of news conferences since the start of the state's lottery to explain that the state would have to sell 1,450 lottery tickets just to purchase one microscope.

Mr. Honig said he requested more than a year ago that the California lottery--the largest in North America with $2.1 billion in annual sales--conduct an advertising campaign to help put the lottery profits in perspective, but lottery officials refused. A spokesman said last week that lottery officials recall the meeting but not the advertising issue.

The lottery commission did, however, stop using the tag line "Schools Win, Too" on advertisements, in part because of educators' concerns and in part because of a change in marketing strategy.

"I want to stress that we are very sensitive to the concerns of education and have attempted to respond to those concerns," said John Schade, the lottery commission's assistant director for public affairs.

Its quarterly reports now note that the lottery accounts for only 3 percent of school districts' budgets, and it has developed brochures explaining the part the lottery plays in the budgets, said Mr. Schade.

But Mr. Honig contends the misconceptions about the lottery "played a major role" in the defeat last spring of a state ballot question that would have given school districts the ability to remove state-mandated spending limitations.

And he says the lottery will again play a part when residents vote in November on a state ballot measure guaranteeing education a percentage share of the state budget.

In San Diego County, a grand jury also entered the lottery fray this month, deciding to examine how the county's 42 school districts have spent their share of education's $800 million in lottery proceeds.

The grand jury's decison to study the issue just reflects the public's confusion about the amount of money generated by the lottery, said Thomas Payzant, superintendent of the San Diego school district.

State legislatures have also contributed to the public's confusion, according to many educators, because they have strayed from the rationale originally used to gain public approval for the legalization of lotteries.

The initial plan in several states that earmarked lottery profits for education was that the proceeds would be used to supplement school funding.

In many cases, it has replaced state revenue instead, freeing dollars for legislators to spend elsewhere. (See Education Week, March 4, 1987.)

In California, state aid to public schools has decreased since the lottery was enacted, education officials say. The same complaint is echoed in other states.

"I think people started getting disillusioned when lottery funds had to be used to underwrite expenditures," said Mr. Payzant.

In Michigan, officials have the same concern. "People feel theywere given a shuffle on the passage of the lottery in Michigan," said Justin King, director of the Michigan School Boards Association.

"They were told the money would go to support education, which it does, but what really happened was that the money was used to supplant other dollars," he said.

Next spring, the Michigan legislature may place on the ballot a proposal that would revamp the school-finance formula by increasing the state sales tax to 6 cents from 4 cents and lowering property taxes. The idea is to create more equity among school districts that must now rely on property taxes as the major revenue source.

But Mr. King said he was not optimistic that the measure would win approval because jaded voters would have to be convinced that their property taxes would actually decrease if they supported a sales-tax increase.

"It's a trust factor," said Mr. King. "The lottery diminishes the chances of this succeeding because people feel like they have had the hustle put on them by the lottery."

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