Where does the lottery money go?
Many schools confused by funding formula.
By Tony Thornton and Beth Gollob Staff Writers
Nearly a year after Oklahoma introduced its first lottery game, the queries still hit the state Education Department — and often.
The phone calls, mainly from teachers and school administrators, start out like this:
“When are we going to start seeing our share of the lottery money?”
“A lot of people seem to think the Lottery Commission was going to just start sending checks to the schools,” state schools Assistant Superintendent Shawn Hime said.
For most educators, the money already is in their pockets.
All of the nearly $53 million distributed this year in projected lottery revenue was earmarked for an incremental pay raise intended to bring teachers’ salaries up to the regional average, Hime said.
In all, gamblers contributed a projected $89 million to common education funding this fiscal year through the lottery and casino gaming.
However, that amount is far short of what’s needed to fully fund the pay raise and to expand full-day kindergarten.
Those were the two major initiatives Gov. Brad Henry cited when touting an alliance with the gambling industry.
Henry said he never thought or conveyed that the lottery and casino money would fully fund both programs.
While pay raise and full-day kindergarten probably wouldn’t have been implemented without the gambling money, “no one should have been under the impression that they would be the only revenue sources used for these programs,” the governor said.
The $3,000 teacher pay raise alone cost $136 million this year. That doesn’t include a $21.7 million funding gap that state schools Superintendent Sandy Garrett said was caused by legislators not approving money to cover related costs such as the state’s share of each teacher’s added Social Security taxes.
Projected lottery revenue for the next 30 years also backed a $475 capital improvement bond for higher education. This year higher ed received $46.7 million in anticipated lottery proceeds. About $15 million was left over for student aid after making this year’s $31.6 million bond payment.
Building projects
While elementary and high school teachers may be confused about where the money’s going, the lottery’s effects are becoming evident on some college and university campuses.
The $475 million, approved by legislators in 2005, was divided among 34 institutions in amounts ranging from $600,000 to $108 million.
Several dozen building projects are in the design phase, but a few are in advanced phases of construction, thanks to private donations or other sources.
The two largest amounts are $66.4 million for a five-story science and technology research lab at Oklahoma State University in Stillwater and $32 million for a chemistry and biochemistry complex at the University of Oklahoma in Norman.
At East Central State University in Ada, workers spend their days atop 80-foot steel beams, creating the shell of what will become a $22.6 million fine arts center.
The center will be named for 1931 graduate Hallie Brown Ford, who donated $5.25 million, the largest single gift in school history.
At Southwestern Oklahoma State University in Weatherford, school officials spent $700,000 to finish a wing on the chemistry building and will put out bids this month for a $2 million theater.
Another $700,000 went toward lab and audio-visual equipment.
“It’s the kind of equipment we don’t get the money for very often,” said Tom Fagan, Southwestern’s vice president for finance and administration.
Southwestern’s total share of bond money was $12 million.
Summer lottery sales lag
Education gets 30 percent from each lottery ticket sold. So, for the state to collect its projected $117.7 million share this year, sales must average $7.5 million per week.
For the first eight weeks of this fiscal year, the actual average was $4.2 million. Lottery officials called that a typical summer-time blip.
Rollo Redburn, the lottery’s director of finance and administration, said new games and the end of summer should return sales to the normal pace.
However, the disparity worries state Rep. Chris Benge, who considers the gambling industry too fickle to plan any state agency’s budget around.
“Some of my concerns seem to be coming to fruition,” said Benge, R-Tulsa, who chairs the House Budget and Appropriations Committee.
Meanwhile, casino gambling proceeds have increased after a dismal beginning.
“From April to June, we experienced an almost 30 percent increase in revenue” from tribal casinos, said Claudia San Pedro, the state finance director.
Her predecessor, Scott Meacham, originally figured the state would receive a combined $52.8 million from tribal casinos and three racetrack casinos for Fiscal Year 2006.
That revenue stream, like the lottery money, became possible in November 2004 when Oklahoma voters approved an expansion of casino gambling options in return for part of the profits.
However, tribes were slow to install the particular electronic games from which the state gets a cut, and revenue estimates for two of the three racetrack casinos proved unrealistic.
Those issues caused San Pedro to dramatically lower the revenue estimates: from $52.8 million to $19.7 million last year and from $71 million to $41 million this year.
Two factors have San Pedro and other state officials betting the state will reach or perhaps exceed this year’s revised estimate.
One is the recent opening of Riverwind Casino near Norman and this month’s planned opening of FireLake Casino near Shawnee. Those venues are the state’s first- and thirdlargest casinos, respectively.
July gaming revenues, boosted by Riverwind’s completion, were $400,000 more than the previous month. “Obviously Riverwind’s opening had a lot to do with that,” San Pedro said.
The other factor is an anticipated rule change around December by the National Indian Gaming Commission. That new policy would virtually force Oklahoma tribal casinos to use games that provide the state some money.
“That will definitely be a key determinator of what happens in the market over the next year,” San Pedro said.
The governor said whatever money the two revenue sources produce is a bonus for education.
“There will always be critics of these programs, but I still believe voters made the right call when they overwhelmingly approved the questions two years ago. Even though they are still in their infancy, the revenue initiatives are already benefiting schools, teachers and students,” Henry said.
Funding formula confusing
Because of the way lottery funds are distributed, it’s often difficult to tell exactly how much money goes where.
“I don’t know a lot about where it goes. I know a certain percentage of it goes to the district,” said Lori Burris, a special education teacher at Midwest City’s Monroney Junior High School. “We’re just a trusting lot, I guess. It’s really confusing.”
David Jones, superintendent of Crowder Public Schools in southeast Oklahoma, said most of his colleagues seem confused about where lottery money goes.
“Everyone I talk to thinks the lottery money is over and on top of the school funding. There’s a lot of misinformation and misunderstanding out there,” he said.
Teachers won’t see a separate check from the lottery commission, but those funds will go directly into their pockets this year, Hime said.
Lottery and gaming dollars generally are lumped into one state aid sum, which then is distributed among public schools. Last year, about 2 cents of every state aid dollar came from lottery funds, Hime said.
Each school’s aid amount is determined chiefly by enrollment, but also by other factors like teacher experience and the district’s size or isolation. Local funding also plays a role, which is why oil and gas revenue kept some schools from getting any state aid last year.
Unlike last year, when lottery and gaming funds were lumped into the total state aid, legislators decided to use this year’s $53 million in education’s lottery proceeds entirely toward teacher pay raises. General state revenue, which includes funds from state income tax, will pay the $83 million balance, according to state Education Department budget documents. In future years, the pay raises will be included in state aid, Hime said.
But state education officials have lamented a $21.7 million funding gap they said was caused by lawmakers not approving additional funds to cover related costs of the pay raise.
Garrett has said she plans to ask later this year for supplemental state funding to help cover fixed payroll costs, such as unemployment, Social Security and retirement contributions.
The shell of East Central University’s new fine arts center protrudes 80 feet into the air. Funded largely with projected lottery proceeds, its construction began earlier than almost any other lottery-backed project with higher education’s $475 million in capital improvement bonds.
Many schools confused by funding formula.
By Tony Thornton and Beth Gollob Staff Writers
Nearly a year after Oklahoma introduced its first lottery game, the queries still hit the state Education Department — and often.
The phone calls, mainly from teachers and school administrators, start out like this:
“When are we going to start seeing our share of the lottery money?”
“A lot of people seem to think the Lottery Commission was going to just start sending checks to the schools,” state schools Assistant Superintendent Shawn Hime said.
For most educators, the money already is in their pockets.
All of the nearly $53 million distributed this year in projected lottery revenue was earmarked for an incremental pay raise intended to bring teachers’ salaries up to the regional average, Hime said.
In all, gamblers contributed a projected $89 million to common education funding this fiscal year through the lottery and casino gaming.
However, that amount is far short of what’s needed to fully fund the pay raise and to expand full-day kindergarten.
Those were the two major initiatives Gov. Brad Henry cited when touting an alliance with the gambling industry.
Henry said he never thought or conveyed that the lottery and casino money would fully fund both programs.
While pay raise and full-day kindergarten probably wouldn’t have been implemented without the gambling money, “no one should have been under the impression that they would be the only revenue sources used for these programs,” the governor said.
The $3,000 teacher pay raise alone cost $136 million this year. That doesn’t include a $21.7 million funding gap that state schools Superintendent Sandy Garrett said was caused by legislators not approving money to cover related costs such as the state’s share of each teacher’s added Social Security taxes.
Projected lottery revenue for the next 30 years also backed a $475 capital improvement bond for higher education. This year higher ed received $46.7 million in anticipated lottery proceeds. About $15 million was left over for student aid after making this year’s $31.6 million bond payment.
Building projects
While elementary and high school teachers may be confused about where the money’s going, the lottery’s effects are becoming evident on some college and university campuses.
The $475 million, approved by legislators in 2005, was divided among 34 institutions in amounts ranging from $600,000 to $108 million.
Several dozen building projects are in the design phase, but a few are in advanced phases of construction, thanks to private donations or other sources.
The two largest amounts are $66.4 million for a five-story science and technology research lab at Oklahoma State University in Stillwater and $32 million for a chemistry and biochemistry complex at the University of Oklahoma in Norman.
At East Central State University in Ada, workers spend their days atop 80-foot steel beams, creating the shell of what will become a $22.6 million fine arts center.
The center will be named for 1931 graduate Hallie Brown Ford, who donated $5.25 million, the largest single gift in school history.
At Southwestern Oklahoma State University in Weatherford, school officials spent $700,000 to finish a wing on the chemistry building and will put out bids this month for a $2 million theater.
Another $700,000 went toward lab and audio-visual equipment.
“It’s the kind of equipment we don’t get the money for very often,” said Tom Fagan, Southwestern’s vice president for finance and administration.
Southwestern’s total share of bond money was $12 million.
Summer lottery sales lag
Education gets 30 percent from each lottery ticket sold. So, for the state to collect its projected $117.7 million share this year, sales must average $7.5 million per week.
For the first eight weeks of this fiscal year, the actual average was $4.2 million. Lottery officials called that a typical summer-time blip.
Rollo Redburn, the lottery’s director of finance and administration, said new games and the end of summer should return sales to the normal pace.
However, the disparity worries state Rep. Chris Benge, who considers the gambling industry too fickle to plan any state agency’s budget around.
“Some of my concerns seem to be coming to fruition,” said Benge, R-Tulsa, who chairs the House Budget and Appropriations Committee.
Meanwhile, casino gambling proceeds have increased after a dismal beginning.
“From April to June, we experienced an almost 30 percent increase in revenue” from tribal casinos, said Claudia San Pedro, the state finance director.
Her predecessor, Scott Meacham, originally figured the state would receive a combined $52.8 million from tribal casinos and three racetrack casinos for Fiscal Year 2006.
That revenue stream, like the lottery money, became possible in November 2004 when Oklahoma voters approved an expansion of casino gambling options in return for part of the profits.
However, tribes were slow to install the particular electronic games from which the state gets a cut, and revenue estimates for two of the three racetrack casinos proved unrealistic.
Those issues caused San Pedro to dramatically lower the revenue estimates: from $52.8 million to $19.7 million last year and from $71 million to $41 million this year.
Two factors have San Pedro and other state officials betting the state will reach or perhaps exceed this year’s revised estimate.
One is the recent opening of Riverwind Casino near Norman and this month’s planned opening of FireLake Casino near Shawnee. Those venues are the state’s first- and thirdlargest casinos, respectively.
July gaming revenues, boosted by Riverwind’s completion, were $400,000 more than the previous month. “Obviously Riverwind’s opening had a lot to do with that,” San Pedro said.
The other factor is an anticipated rule change around December by the National Indian Gaming Commission. That new policy would virtually force Oklahoma tribal casinos to use games that provide the state some money.
“That will definitely be a key determinator of what happens in the market over the next year,” San Pedro said.
The governor said whatever money the two revenue sources produce is a bonus for education.
“There will always be critics of these programs, but I still believe voters made the right call when they overwhelmingly approved the questions two years ago. Even though they are still in their infancy, the revenue initiatives are already benefiting schools, teachers and students,” Henry said.
Funding formula confusing
Because of the way lottery funds are distributed, it’s often difficult to tell exactly how much money goes where.
“I don’t know a lot about where it goes. I know a certain percentage of it goes to the district,” said Lori Burris, a special education teacher at Midwest City’s Monroney Junior High School. “We’re just a trusting lot, I guess. It’s really confusing.”
David Jones, superintendent of Crowder Public Schools in southeast Oklahoma, said most of his colleagues seem confused about where lottery money goes.
“Everyone I talk to thinks the lottery money is over and on top of the school funding. There’s a lot of misinformation and misunderstanding out there,” he said.
Teachers won’t see a separate check from the lottery commission, but those funds will go directly into their pockets this year, Hime said.
Lottery and gaming dollars generally are lumped into one state aid sum, which then is distributed among public schools. Last year, about 2 cents of every state aid dollar came from lottery funds, Hime said.
Each school’s aid amount is determined chiefly by enrollment, but also by other factors like teacher experience and the district’s size or isolation. Local funding also plays a role, which is why oil and gas revenue kept some schools from getting any state aid last year.
Unlike last year, when lottery and gaming funds were lumped into the total state aid, legislators decided to use this year’s $53 million in education’s lottery proceeds entirely toward teacher pay raises. General state revenue, which includes funds from state income tax, will pay the $83 million balance, according to state Education Department budget documents. In future years, the pay raises will be included in state aid, Hime said.
But state education officials have lamented a $21.7 million funding gap they said was caused by lawmakers not approving additional funds to cover related costs of the pay raise.
Garrett has said she plans to ask later this year for supplemental state funding to help cover fixed payroll costs, such as unemployment, Social Security and retirement contributions.
The shell of East Central University’s new fine arts center protrudes 80 feet into the air. Funded largely with projected lottery proceeds, its construction began earlier than almost any other lottery-backed project with higher education’s $475 million in capital improvement bonds.