Multistate-Lottery Plan Getting Cool Response

By Bill Montague — September 17, 1986 4 min read

A proposed multistate lottery is getting a less-than-enthusiastic response from some educators, despite claims that the game would be a lucrative source of revenue for schools and other social programs in participating states.

Eleven states, including such giants of the lottery world as New York, Illinois, and Ohio, have expressed a willingness to participate in the game, organizers say.

A governing board composed of official from the 11 states is now designing the new game, according to John D_ Quinn, the director of the New York State lottery. The first drawing, he said, could be held as early as next fall.

Even taking into account the expected reduction in ticket sales for New York’s existing games, the multistate lottery could earn New York between $50 million and $100 million, Mr. Quinn said.

Because the total take of the game will depend on which state participate and how the new lottery affects their own games, he added, it is hard to predict expected revenues.

Educators Wary

The prospect of higher lottery earnings, however, is not causing much of a sensation among education groups, even though in past I years many of them have strongly supported lottery proposals in their own states.

“We are very suspicious’ of any suggestion that a new lottery is going to mean more money for public schools,” said Thomas J. Pisa, president of the National Education Association of New York. “It’s not entirely clear, but what figures we have seem to show that lotteries don’t help us.”

Like many education officials, Mr. Pisa argues that state legislatures tend to substitute lottery funds for other state revenue, resulting in little or no net increase in school spending. In addition, taxpayers tend to oppose needed revenue increases because they believe the lottery has made them unnecessary.

Currently, 22 states and the District of Columbia operate lotteries. In six states, some or all of the state’s earnings are allocated by law to education programs.

Thtal lottery sales increased by more than 25 percent in 1985, reaching $2.081 billion, according to the trade publication.

Gaming and Wagering Business

Interest in the game has continued to grow, especially In states i faced with severe economic woes, such as the farm-belt and oil-producing states. According to the National Association of State Budget Officers, 11 states considered lottery referendums or initiatives this year.

In at least eight states-Florida, Idaho, Kansas, Montana, Nebraska, North Dakota, Oklahoma, and. South Dakota-voters are likely to face the issue on the November ballot. In several of the states, educators are supporting the games as a way to shore up education spending in the face of threatened cuts by cash-starved state governments.

For many small states, such as Delaware, New Hampshire, and Rhode Island, the proposed multistate game offers an opportunity to boost gambling revenues because the new game will offer bigger jackpots than they can afford in their own lotteries.

Higher Revenue

When New Hampshire, Vermont, I and Maine joined together in 1984 to start their own regional game, New Hampshire’s lottery revenues more than doubled, according to that state’s lottery director.

While declining to speculate on the number of states that will eventually join the new game, Mr. Quinn of New York noted that some states that adjoin participating states may feel a strong incentive to sign on. That is because, he said, many residents in the nonparticipating states will take their gambling dollars across the state lines.

In California, which began its own game last year, neither state officials nor education lobbyists have expressed interest in joining the new game.

“I think most people feel that our own game is still too new for us to be moving on to that plane,” said Cathy Davis, a spokesman for the California School Boards Association.

Although California, unlike a number of other lottery states, does not mix lottery funds with general education aid, concern has also arisen about public misperceptions of the game’s role in paying for school construction and other needs.

Last month, the legislature approved a bill that would require the state lottery commission to include a disclaimer in its advertisements pointing out that the game only accounts for a small fraction of California’s education budget.

Spending Needs

According to the state department of education, primary and secondary schools received about $526 million from the lottery in fiscal years 1985 and 1986. That represents less than 4 percent of total state spending on education. The question of what districts do with their lottery funds has attracted considerable attention in the state. A study by the schoolboards association found that districts are spending their money in widely varying ways, from such equipment purchases as copy machines and satellite dishes to staff development courses, longer library hours, and even animal carcasses for science laboratories.

Some districts, however, are using the money to pay for teacher pay increases, a practice that may leave them in a fiscal bind if lottery revenues should suddenly drop, warned a study by a state commission on government efficiency.

The Los Angeles Unified School District, on the other hand, wants permission to use lottery funds to build schools, easing a severe space shortage caused by booming enrollment.

State law forbids the use of lottery funds for construction needs. The district, supported by the schoolboards association, has asked the legislature to remove the ban.

A version of this article appeared in the September 17, 1986 edition of Education Week as Multistate-Lottery Plan Getting Cool Response