From the archives: How much Idaho lottery money goes to public schools?

Note: This story was originally published on Jan. 18, 2015

The date was July 19, 1989.

J.R. Simplot looked to dispel the notion that lotteries prey on the poor and uneducated as he took to the Capitol steps to purchase the inaugural Idaho Lottery product - a $1 scratch ticket.

The ticket was a loser, but it announced a new, and controversial, revenue source for the Gem State.

Proponents pitched the lottery as a boon for education funding, but 26 years later, Idaho schools are operating at a minimum: The state is second-to-last in per-pupil education funding and boasts some of the lowest teacher salaries in the nation. That's led some to question whether the lottery has lived up to its promise.

"Has (education funding) been as much as some of the proponents originally said? Possibly not, " said Senate President Pro Tem Brent Hill, R-Rexburg. "I think people thought it would be a much greater boost to our education spending."

The 1 percent

The electorate originally voted in favor of the lottery in 1986, but at the time it was deemed unconstitutional. In 1988, 51 percent of voters approved a constitutional amendment to make it legal.

As of Friday, the lottery has returned $672.4 million to the state. That sounds like a lot, but broken down, it's about 24.5 percent of the lottery's $2.74 billion in ticket sales. To date, the lottery has given $292.9 million to the public education building fund.

In the 2014-15 school year, the lottery returned a dividend of $18.375 million to the state, according to the lottery's financial information. That's about 1.3 percent of the state's $1.37 billion general fund budget.

"I think one of the points to be made here is while it was pitched as an important supplement, it has only come to represent 1 percent of the budget, " said David Adler, a constitutional scholar and political analyst.

Following the money

The education funding amount is partly due to Idaho's high payout rate: Census data shows the Gem State has the 10th-highest payout percentage in the country; about 67 cents of every dollar is returned to lottery players as winnings.

The remaining 27 cents is split between a fund responsible for maintenance of all state buildings (including state universities), a fund to local school districts to help pay for building maintenance, and the bond equalization fund, which helps to keep lower-income school districts' levy amounts lower when they seek to pass a bond.

In 2014, $18.38 million went to the state's Permanent Building Fund and $12.25 million to the Bond Levy Equalization Fund.

"Put another way ... 1 cent of every dollar that we send out is really based on our lottery dividend, the rest is state appropriations, " said Tim Hill, deputy superintendent in the division of Public School Finance at the Department of Education. "We get calls occasionally from patrons saying, 'I don't know why schools are complaining about having no money, I thought the lottery was going to take care of it.' When I give them that number, they say, 'I didn't realize it was such a small percentage of appropriations.' "

Sheila Olsen, an Idaho Falls community activist and opponent of the lottery, says it's misleading.

"I wasn't particularly impressed with taking something that was not healthy or good for people to do, and spin it for education, " Olsen said. "I saw a dichotomy there."

Joe Groberg, a former Idaho Falls councilman, worries that tying the success of a gambling operation to education funding inherently creates a problem. If the economy falls on hard times, there is a funding void, Groberg said.

The lottery then is pressured to produce more money. That could mean larger marketing campaigns, which result in more Idahoans playing the lottery - and, in turn, losing money.

"You're looked at as a fountain of income, " Groberg said.

Confusing message

A new commercial for the lottery highlights the revenue given back to the state. The commercial starts out by expressing the gravity of the number 600 million, relating it to miles, words and digital storage. Then it goes into how many school supplies could be purchased with more than $600 million: 2.4 million whiteboards, 2 million tablet computers, 30 million dodge balls. The commercial shows images of classrooms and school gymnasiums.

But the message can be confusing. A viewer could assume the more than $600 million has been used to buy whiteboards, tablets, dodge balls and even Crayons.

In closing, the commercial pans to an empty school hallway, with sun shining on the floor, as the narrator says the lottery has "given more than $600 million to Idaho's public schools and the permanent building fund."

Actually, $292.9 million has gone to the state's K-12 schools. Because lottery money can be used only to maintain buildings, none of the items highlighted in the commercial may be purchased with lottery proceeds.

Lottery money designated to the permanent building fund may be used for maintenance on public university buildings, but it also could be used to maintain any state building.

Adler wishes school leaders had the freedom to decide how to spend lottery money. He said he would like to see the Legislature look at redesigning the manner in which the money is distributed.

"It seems reasonable for the Legislature to reconsider how the funds are (spent), particularly because the state has thus far failed to restore the loss of funding going back to '08, " Adler said.

Others aren't suggesting the lottery disappear, but they know the lottery money isn't an end-all solution to education funding.

"As a teacher, it doesn't turn the system around, " said Jim Francis, who taught in Idaho Falls School District 91 for several decades. "It's not in itself education reform. ... I don't suggest we throw lottery money away or give it up ... but it's not in itself a game-changer."

This story was originally published January 18, 2015 at 4:08 PM with the headline "From the archives: How much Idaho lottery money goes to public schools?."