Inside the Pace High Carryout convenience store in Columbus’ Clintonville neighborhood, shelves are lined with candy, chips and brightly colored cans of craft beer. At the front counter sits a lottery terminal used to sell and print tickets.
Lottery tickets are sold at terminals like this one in more than 10,000 retail locations across Ohio, where they contribute to billions of dollars of sales every year.
At times when school levies and property tax relief are hot-button political issues, a persistent myth about Ohio Lottery profits and education tends to resurface.
Pace High Carryout Owner Dev Patel said he’s aware that the profits go toward schools, but isn’t sure of the details.
“What I have heard, it does go towards school education. I don’t know what portion... nothing besides that,” Patel said.
One hundred percent of Ohio Lottery profits go to K-12 education. In the last fiscal year, that amounted to more than $1.4 billion.
That sounds like a big number, and it prompted one listener to write in to WOSU’s Curious Cbus to ask: “Wasn’t the state lottery supposed to replace property taxes as a method of school financing? What happened to that idea?”
Danielle Frizzi-Babb, communications director for the Ohio Lottery, said she isn’t sure where that misconception came from, but it’s been around for decades.
“The lottery was created to help support education in the state of Ohio. And 'support' is really the key word there,” Frizzi-Babb said. “Where that myth got started, I have no idea. And I wasn’t around back in 1974.”
The Ohio Lottery began more than 50 years ago. Voters passed a constitutional amendment in 1973, and ticket sales began the following year.
The argument for legalization at that time would sound familiar to anyone who remembers debates around casinos, sports betting or marijuana: Ohio was losing out on revenue to neighboring states. But the idea that lottery proceeds would replace property taxes or fully fund education was never promised or publicized.
Still, from the start, a large portion of lottery profits was earmarked for education.
In 1983, the lottery ran a television commercial voiced by legendary actor James Earl Jones, the voice of Darth Vader, promoting “Ohio Lotto’s Big Money Game.” That same year, all lottery profits began going directly to the state’s education budget.
Bill Shkurti, an adjunct professor of public policy at Ohio State University, served as director of the Ohio Office of Budget and Management in the 1980s. He said state officials wanted to make the funding as transparent as possible.
“Being in the smoke-filled room where the deals were cut, I never heard anyone say, elected official or otherwise, ‘Well, K-12 gets all that lottery money, so let’s screw them on general funds and get away with it,’” Shkurti said. “Rather, it was, ‘Let’s get this off the table, be transparent about it, and deal with it as it is.’”
Lawmakers created a separate line item called the Lottery Profits Education Fund to ensure the money went directly to schools.
In 1987, Ohio voters approved another constitutional amendment clarifying that all lottery profits must go to education.
Since then, the lottery has raised billions for schools, but those funds have always represented a relatively small share of the total K-12 budget.
In the most recent fiscal year, the $1.4 billion in lottery profits accounted for only about 12% of the state’s roughly $13 billion K-12 education budget.
Shkurti said it is an important revenue source that the state would not want to lose.
“That would be a significant loss,” he said. “So again, the context of this thing is it’s not a silver bullet, it’s not nirvana, but it is helpful.”
Frizzi-Babb said the lottery takes pride in supporting education, but noted that its role is limited.
“We put the money into the fund, and we are excited to put the money into the fund,” Frizzi-Babb said. “How it’s distributed is not a function of our agency.”
The education budget is set by the legislature. When lottery sales go up, more lottery money is available, but that doesn’t increase the overall education budget. It simply means a larger portion of the funding comes from the lottery and a smaller portion from general tax revenues.
At the end of the day, state funding, including the lottery’s contribution, doesn’t cover the full cost of educating Ohio’s K-12 students. Local school districts still have to make up the difference through property and income taxes.
