Being that I write about public policy, I routinely
get hit with this question: “Where does all the lottery money go?”
A narrative that many people believe is that when
the state lottery was instituted it was intended to cover the cost of public
schools throughout New York. While it’s true that lottery income was intended
to help education, it was never supposed to cover it in full. Despite the
number of tickets New Yorkers buy, it simply can’t.
The New York lottery brought in $9.68 billion in revenues
in fiscal year 2016-2017. After taking away prize money and sales, the system
was left with $3.27 billion in profits (a whopping 34%), which was invested in
school aid. For that same year, public schools had cost New Yorkers – at the
federal, state, and local levels of taxation -- $62.7 billion.
So, as you can see, gambling proceeds barely put a
dent in spending, accounting for just over 5% of expenses. Even if New York’s
educational spending was at the national average ($11,400 versus $22,600), we’d
still be looking at the lottery covering less than 10% of the total cost.
That doesn’t mean that it’s not helping. In
2016-2017, the Lottery issued $48 million to schools in Niagara County, $11
million in Orleans County, and just under $14 million to districts in Genesee
County.
Had those funds not been in play, my school
district Royalton-Hartland, for example, would have had to lean on homeowners
for another $2.1 million in 2016-2017, all things being equal. Other examples
of district-specific lottery revenues are Lockport at $8.1 million and Batavia
at $3.7 million.
Since the inception of the lottery in 1967, it has
paid out $48 billion to schools. $1 billion has gone to Niagara County schools
alone.
I don’t care if you live in a rural school district
or a big city system. That’s not chump change. It’s the difference between
keeping and losing teachers, the arts, and sports.
This manages to work to the advantage of taxpayers because
New York pilfers from players at a rate that’s similar to how it taxes
homeowners: Despite New York having the highest traditional lottery sales in
the country, its payout rate is among the lowest. While that means more money
for schools, it means less money for winners and greater expenditures by
players who have try harder to come out ahead.
There are some legislators – like Senator Tim
Kennedy of Buffalo -- who are trying to make those odds even worse to the
benefit of public schools. He has been toying with legislation that would
decrease the payouts to players by considerable amounts, which some quick math
shows could increase school funding by $1.5 billion.
It would probably work because state-run gaming has
been one of the few growth industries in the Empire State (maybe hopeful
players are trying to overcome an increasingly-bad upstate economy?). The New
York lottery’s 2016-2017 revenues were 26% higher than they were 10 years earlier
while its payments to schools were up 28%.
When the lottery began in 1967 its first slogan was
"Your Chance of a Lifetime to Help Education". 51 years into the
program, it has been almost a lifetime, and the lottery has been doing what was
intended, helping education. It’s not the end-all-be-all for funding our
schools, but it’s a start.
From the 07
May 2018 Greater Niagara Newspapers and Batavia Daily News