Ga. Enters Struggle Over Lottery Funding for Schools

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Georgia lawmakers and Gov. Zell Miller are the latest state officials to take up a challenge that has foiled many policymakers in recent years--finding a way to channel state-lottery proceeds to the schools without either supplanting current funding or misleading voters.

Georgia voters this fall will consider a proposed constitutional amendment authorizing a lottery supporting education programs. Betting that the referendum is a sure winner, state officials this week are sot to grapple with the question of how to divide the estimated $250 million a year in proceeds.

As the lottery debate gains momentum in the Peach State, it has also become a focal point in at least two other state capitals.

In Missouri, where voters last year rejected a tax hike for education in part because of a widespread but mistaken notion that lottery revenues were reserved for education, lawmakers are examining whether the proceeds should indeed be "earmarked" for the schools.

In Florida, meanwhile, Gov. Lawton Chiles has joined educators in criticizing the lottery for doing little to fund new education programs, as was promised when it was created, and is pushing for reforms.

Learning From Mistakes

Georgia officials acknowledge that they are traveling a course known more for its failures than successes, but add that they have profited from others' frustrations.

"We made an effort to at least learn from the mistakes some other states have experienced," said Steve Wrigley, a senior aide to Governor Miller, who used the lottery as a primary issue in his 1990 campaign.

Mr. Miller's proposal would earmark 30 percent of lottery profits for each of three programs: pre-kindergarten programs for poor 4-year olds; a capital-spending and equipment-purchase program for school districts and colleges; and scholarships for poor but academically promising high-school students.

The remaining 10 percent of the lottery funds would be put into a reserve account.

In an effort to keep the lottery funds from blending into the state's general-fund budget, the referendum would make lottery proceeds a separate budget category.

Mr. Miller's proposal is scheduled to go before the House Industry Committee this week. The chairman of that panel has already expressed concerns about the Governor's strategy and emphasized the need for Georgia to avoid the pitfalls experienced in other states.

"We want it to be used on one-time expenditures, where it can make enhancements rather than getting locked in on certain programs," said Representative Roy H. (Sonny) Watson Jr., who said he will urge lawmakers to use lottery funds for "oneshot" efforts.

"We've got people in temporary housing and trailers, and the computers in our classrooms are way behind," he said. "If we've got all of the lottery funds obligated to ongoing programs, and the lottery funds go down, then we've got to cut back or cut them out."

Mr. Watson said he wants to make sure that the games' profits do not become the sole support for any long-term program.

The Lottery 'Distraction'

The Georgia officials' concerns spring from the lottery-funding misfortunes triggered in other states by the euphoria and subsequent letdown created by new games.

Voters with high expectations who approve lottery games because they will benefit schools often become bitter once they learn that the funds do not make much difference, said John L. Myers, the education program director for the National Conference of State Legislatures.

In 33 states and the District of Columbia, lotteries raised nearly $7.5 billion during fiscal 1990--barely more than 3 percent of total tax collections in those jurisdictions.

"We've asked whether any [revenue source] should be earmarked, and the answer is that it is clearly not a good idea to earmark taxes for education," Mr. Myers said. "Unless you earmark a tax large enough to support the program and that grows with the need, you are going to fall short, and with education, there is just no Way."

State officials in Texas, where voters last fall approved a state lottery, quickly dismissed the idea of pegging proceeds to school funding.

"It was used as an argument when they thought the votes would be close, but honestly, the notion of earmarking the lottery money was faint," said Soma Hernandez, the education policy director for Gov. Ann W. Richards.

"A stable, reliable funding source is what you need for education, and you can't get that from a lottery," Ms. Hernandez said. "Unfortunately, even the most well-intentioned groups who think it will help the schools find out that, in the long run, it won't. It's just a distraction. We didn't want to go through that."

Despite the drawbacks, Mr. Myers noted that several states are considering either establishing a lottery or expanding the current games into new areas.

'Buy Back the Lottery'

In Missouri, the crushing defeat of last fall's education-funding referendum is pushing some lawmakers in the other direction, toward earmarking lottery revenues.

Apparently, many voters decided against a tax hike for the schools because they thought that lottery funds

were already being devoted to education, even though game proceeds in fact are not earmarked and go into the state's general budget fund.

In the wake of the defeat, several bills have been introduced to earmark lottery proceeds--about $73 million a year for education.

Cautious state education officials have warned, however, that funds would be spread too thin and further confuse voters.

At the same time, Governor Chiles of Florida is trying to restore the lottery's credibility by proposing new state taxes that would begin to halt the financial shell game that has irked educators and confused voters.

"We must buy back the lottery," he said in his State of the State Address last month. Mr. Chiles has proposed a plan that would impose the state's sales tax on several previously exempted items. The proposal would generate $155 million to take the place of misdirected lottery funds, which would then be freed to finance "the enhancement of education."

Mr. Chiles, who used lottery reforms as a campaign theme, has often noted educators' frustration with the promised but largely elusive benefits of the lottery.

"They feel bamboozled," the Governor said. "We've got to rid ourselves of this mistrust."

In a separate but related effort, some lawmakers are pushing a plan under which 70 percent of lottery proceeds aimed at schools would be sent directly to local school districts, where officials would be able to determine how to spend the funds.

Vol. 11, Issue 20, Pages 18, 20

Published in Print: February 5, 1992, as Ga. Enters Struggle Over Lottery Funding for Schools
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