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Ins and Outs

State lottery dollars should come back to school districts in direct proportion to the amount that their residents spend on lottery games, Democrats in the Michigan House of Representatives argue.

Under a bill proposed by Rep. Clarence Phillips, revenues and unclaimed prize money from the Michigan lottery would be distributed to districts in proportion to lottery sales in the districts.

Clarence Phillips

Such a change, supporters note, would bring in more money for schools in Michigan's cities, which outspend suburbs and rural areas on the lottery on a per-person basis.

"Those communities with the largest participation in the lottery are the communities that need those dollars the most," said Rep. Phillips, a Democrat from Pontiac.

Six percent of Michigan's school aid fund this year comes from lottery revenue—$810 million out of a total of $13.5 billion. Sales-tax revenue contributes the lion's share—46 percent—with lesser proportions from property taxes (14 percent), income taxes (20 percent), and other sources.

Mr. Phillips said that residents in the Pontiac school district generated $23 million in lottery revenue during the last fiscal year, but that the public schools there received only $4.4 million of the money.

But Kelly Chesney, a spokeswoman for the Michigan Department of Management and Budget, called the proposed legislation "a Pandora's box."

"It would be likely to start a discussion from more affluent areas asking for their proportion of the school aid fund" from property and income taxes, she said. "It's contrary to everything we're trying to do, which is raise the low- spending districts up."

Under Republican Gov. John Engler's budget, this year the state will provide a minimum of $6,000 per pupil to school districts, with the amount to rise to a minimum of $6,700 per pupil in fiscal 2003.

—Bess Keller

Vol. 20, Issue 39, Page 14

Published in Print: June 6, 2001, as State Journal

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