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Scratching Off Money for Schools

Thursday, May 20, 2004 at 9:02 AM

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Ohio Lottery tickets first went on sale 30 years ago. It was seen as a way to collect a voluntary tax to support education. But, as ideastream's Tasha Cook reports, schools aren't necessarily the winners, and some question to what extent the Ohio Lottery has held to its promise of helping schools.

Since its creation, the Ohio Lottery has expanded to include not only instant games, but the Pick 3 and Pick 4 numbers games, the Buckeye 5 and the Super Lotto. Last year the games raked in a little over $2 billion in ticket sales for fiscal year 2003. Of that, Ohio public schools received close to $641 million. Mardele Cohen is spokesperson for the Ohio Lottery Commission.

Mardele Cohen: Our profits, every penny of our profits, goes to education in the state of Ohio, K through 12.

Bill Phillis says that’s technically true, but he doesn’t think schools are any better off with the lottery money. Phillis is Director of the Ohio Coalition for Equity and Adequacy of School Funding, which backed the 10-year DeRolph lawsuit aimed at reforming school funding in Ohio. Phillis accuses the state legislature of creative financing and diverting dollars that ought be earmarked for education. He says Ohioans often ask him what happened to the lottery money promised for schools.

Bill Phillis: The answer is, ‘Well, it kind of got lost in the tax pool - the tax revenue poll and is distributed to schools as part of the total package. It doesn’t increase the amount of money for schools. It kind of maintains the amount of money that would be there anyway.’

State Representative Edward Jerse, a Euclid Democrat who is also on the Finance and Appropriations Committee, acknowledges that legislators anticipate lottery profits when they calculate the general revenue support for education.

Edward Jerse: The legislature has chosen to put that money in other areas or has chosen to go in the direction of tax cuts, and in that way, they have not met the expectations of Ohioans that education would be the big winner from the lottery.

After its inception in 1974, lottery profits went into the state’s general revenue fund. But in 1987, the legislature created a special Lottery Profits Education Fund. This was in response to voter support for an Ohio constitutional amendment mandating that lottery profits be used for public education.

Tom Mooney: They got tricked.

That’s Tom Mooney, president of the Ohio Federation of Teachers, and he’s referring to the voters.

Tom Mooney: If you promise people that this gambling is going to fund schools, you’re selling them snake oil, and it’s going to hurt schools in the end.

Has the lottery been good for Ohio? Yes, according to Ron Mottl, the former state legislator who successfully pushed for passage of the Ohio Lottery. Mottl says he’s proud of its success.

Ron Mottl: Thank God we’ve had the Ohio lottery all these years because it’s kept down the sales tax and the income tax.

But as for being a benefit to education, even Mottl is disappointed. He says the lottery’s role in helping state public education falls short of what he originally envisioned. Lottery profits today make up 8% of the state’s contribution to schools.

Ron Mottl: It certainly upsets me because what I’d like to see is additional funds flow from the lottery and not having the legislature anticipate what they’re going to do and then take that money that should have been funded for education and use it elsewhere.

One researcher takes the issue a step further. Donald Miller, a professor at Saint Mary’s College in Indiana, has studied legalized gambling in 48 states. He concludes that state lotteries may actually lead to lower funding for education. His 1997 study titled, Lotteries for Education: Windfall or Hoax, found that the promise that lotteries can painlessly provide additional money for education is false. In fact, Miller’s research found that states are likely to actually decrease their growth of education spending over time, regardless of the amount of money generated by a lottery. And Miller says Ohio mirrors a national trend, where lottery proceeds have become a financial crutch.

Donald Miller: I think the funding crisis is not because of the lottery. But it could be alleviated if they actually put the lottery money as promised on top of educational funding after they had funded it from other things.

Education and lottery officials agree that without the infusion of Ohio Lottery proceeds, legislators would be hard pressed to plug a gaping $641 million hole. The Ohio Supreme Court has declared the state’s heavy reliance on property taxes to fund education to be unconstitutional. But Ohio Lottery profits, according to state education officials, could never cure what ails state school funding.

The state’s experience with the lottery may inform the current debate about allowing casinos and video slot machines at horse racing tracks. It’s been thirty years since the Ohio Lottery began, and legislators are debating whether current gambling proposals should be tied to education funding. In Cleveland, Tasha Cook, 90.3.

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