Michigan Lottery and Schools

[birwood]

Is anyone else old enough to remember in the early 1970's when, the state lottery was conceived. At that time we were promised by every supporter, that if the proposal to create a lottery passed at the ballot box, that 100% of the proceeds would go entirely to funding education in Michigan. A lottery, within 10 years of conception, would end the need for any school district millages and higher education scholarships would be readily available to all, Does anyone else remember this ?
My questions are:, Where Is All The Money ? I see billboards claiming jackpots in triple digits but where has the money for education gone? How much of each pot does education actually get ? How much gets skimmed off into other funds? How much goes into alledged Administrative Costs? Can anybody answer this?
Maybe the State Lottery Commission needs auditing and to be publically scrutinized or at least re-structured to put the money back into education where it was orginally destined

[jiminnm]

The legislated percentage goes to education. What the legislature started to do in the late 70s or early 80s, however, was to reduce [[or slow the increase) of education funding from other sources. As a result, the education funding was not increased in an amount equal to lottery funding.

[Mikeg]

According to this source, "Proceeds from the state lottery make up about five percent of the total amount spent on public education."
Attachment 3550

Let's keep things in perspective.

[EastsideAl]

The lottery simply doesn't, hasn't, and never will generate anything like the kind of money that's necessary to support the entire state's schools. I keep hearing from people "where's that lottery money?" but those people don't seem to fathom the actual scale of the budget of a state the size of Michigan or how the lottery functions financially.

In fact, in order to keep a steady stream of ticket buyers, the lottery pays out a greater percentage of its gross earnings in prize money than it generates in profit. According to the Lottery Commission, since its inception in 1972 the lottery has generated $40 billion in total revenue. Out of that, $21.8 billion was paid out as prize money and $2.7 billion was paid in sales commissions to retailers, leaving about $15 billion in net revenue that went to the state schools fund.

$15 billion would be barely enough to pay for a single year's worth of state schools funding these days, let alone the 37 years since the lottery was instituted. As the chart posted above by Mikeg shows, the money generated by the lottery is really a drop in the very large bucket of state school funds.

[Blueidone]

I agree EastsideAl...but they have never advertised the fact that, as jiminnm said, they reduced the amount of general funds budgeted for schools by the amount the lottery put in. Therefore, the amount going to schools never increased just because of lottery dollars, which is what a majority of citizens thought was going to happen.

[gazhekwe]

I remember that's what we all thought, schools would get MORE money, not the same amount. Lottery benefits the general fun, not the schools at all. All they do is reduce the amount of state tax money going to the schools by the amount of lottery money that comes in.

I worked on federal contracts that the state had to investigate concurrent complaints. The way the contracts were written the federal money was supposed to increase funding for our department. It turned out to be the same thing as lottery and schools. We got the same amount of money, no matter what. If we got federal funds, the state funding would go down by the same amount. So we had more work to do for not more money.

[Mikeg]

I see billboards claiming jackpots in triple digits

Those billboards are for the Mega Millions lottery, whose tickets are sold in 12 different states. The weekly ticket sales for this lottery average about $24 million and according to their web site, about 35% of total sales are returned to the 12 states for their use. That would mean that the state of Michigan gets somewhere between $30 and $40 million each year from Mega Millions proceeds, which is only about 5% of their $700 million annual proceeds that go to the state school budget.

Maybe the State Lottery Commission needs auditing and to be publically scrutinized

You're barking up the wrong tree. I think that more public scrutiny is sorely needed on the government spending side of the equation, not the revenue side. We need greater transparency in state and local government spending and that begins with shining the light on where our tax dollars are spent and who the recipients are.

[birwood]

Mike, I don't think I'm barking up the wrong tree but like you said it needs it on the government spending side, not the money going to the kids, I should have been clearer, sorry.
But, Ya know I see all these giant jackpots but then see that some school districts have to eliminating bus service, band, sports, etc,etc, etc and I still wonder where is all the money going ?
Like I mentioned, when the big push for the lottery in 1972 came about, I remember our State Represenative [[ I can picture him but not his name....someone help me out)from the Warrendale Area, [[I was just out of the USAF and living with my folks on Penrod), held a meeting at either Ruttiman or Herman school, pushing for its support and boasting there would NEVER be another need for a school milage if it passes. I went with my parents, my Mother who worked in the lunch room at Cody was 100% for it, my Father really wasn't too keen on the lotto and during a question and answer period, I remember the State Rep saying to my Dad, "You know I could go back to Lansing and suggest legislation to impose a special tax on all the Bingo Pot winners at the K of C", and that was the end of the discussion.
Yeah, maybe the whole question and idea was out of line, but I still feel that the kids are being short changed as to what was originally promised and the percentage they receive should be larger

[vetalalumni]

I too recall the exciting way the lottery was promoted as a great plus for the schools. Adults were excited of course, and Northville had a new competitor. It was presented as a win-win [[or win-small loss) situation.

[NoHeartAnthony]

But, Ya know I see all these giant jackpots but then see that some school districts have to eliminating bus service, band, sports, etc,etc, etc and I still wonder where is all the money going ?

The money generated from the lottery just isn't enough to support the kids.

"In fact, in order to keep a steady stream of ticket buyers, the lottery pays out a greater percentage of its gross earnings in prize money than it generates in profit. According to the Lottery Commission, since its inception in 1972 the lottery has generated $40 billion in total revenue. Out of that, $21.8 billion was paid out as prize money and $2.7 billion was paid in sales commissions to retailers, leaving about $15 billion in net revenue that went to the state schools fund.

$15 billion would be barely enough to pay for a single year's worth of state schools funding these days, let alone the 37 years since the lottery was instituted. As the chart posted above by Mikeg shows, the money generated by the lottery is really a drop in the very large bucket of state school funds." - EastsideAl, in case you missed it.