NC Education Lottery: Where is the Money? - WECT, weather & sports Wilmington, NC

NC Education Lottery: Where is the Money?

School administrators say they aren't seeing the windfall of lottery dollars the public thinks they are. School administrators say they aren't seeing the windfall of lottery dollars the public thinks they are.
Only 22% of the money the schools do get is earmarked for construction. Only 22% of the money the schools do get is earmarked for construction.
NC School Spending Trends (Source: Dept. of Public Instruction) NC School Spending Trends (Source: Dept. of Public Instruction)

Hundreds of millions of dollars. That's what local school leaders will be hoping for in November, when voters will go to the polls to consider school bond referendums that would be used for school construction.

While there's little debate that more space is needed for the growing student population, many of you have asked why more money is needed when schools are already getting millions of dollars each year from the education lottery.

WECT spent several months investigating just how much money is making its way to the schools, and why they say they still need more. 

If you believe the hype, you might think that the education lottery has been a windfall for North Carolina public schools.

Make no mistake, the schools get plenty of lottery money, $454 million last year alone, but that's only about a quarter of the $1.7 billion the lottery brought in last year.

It's a much smaller percentage than many people expected, including State Representative Frank Iler.

"I was just an average citizen when [the lottery] came in, and I thought it was half. I guess I read it, or heard it that half the money was going to go to schools," Iler said.

Although widely believed, the perception that schools would get half the lottery money was never right. The original legislation designates half the money would go to prizes, 15 percent to expenses and administration of the lottery, and just 35 percent for the schools.

But the schools aren't even getting that much anymore. According to the Department of Public Instruction, of the money they are getting, a lot goes to teacher salaries, pre-K programs, college scholarships, and financial aid.

That only leaves 22 percent of the schools cut for construction. That's about $100 million each year which gets divided by all the school districts in the state.

Jessica Swencki, the spokeswoman for Brunswick County Schools, explained to us how that plays out on a local level.

"It does not go very far," she said.

Swencki said Brunswick County got about $800,000 last year which went to re-roof one of their aging middle schools

"The average price on one of those middle school roofing projects is around $1.2 million, so it really pays for about three-fourths of a roof, if you really think about the check that Brunswick County Schools actually receives."

Lottery funds also pay the salaries of some of our local teachers, which benefits local schools, but you might be surprised to see that since the lottery started.

Per-pupil spending in North Carolina has not made any staggering progress.

Before the education lottery, North Carolina spent an average of $7600 per student/per.

Six years after lottery money began coming to schools, North Carolina is spending $8400 per student/per year.

That amounts to a spending increase of about 2 percent a year on average, which is less than the average annual spending increase before the lottery came on board.

Unfortunately, the recession hit shortly after the lottery began, and school administrators say lottery dollars ended up helping the state balance its budget.

"It has not been an additional revenue stream that systems have received," said Swencki, explaining that the lottery dollars wound up supplanting state funding, rather than supplementing it.

"If we did not have that funding stream, the impact to local systems could have been far more significant," she continued.

While lottery money helped cushion the financial blow to schools during the downturn, insiders say it could actually be hurting schools now - as they struggle to sell the need for hundreds of millions of dollars to build new schools, and maintain existing ones.

"I think the perception now is off. People don't know where the lottery money goes," Rep. Iler said.

Swencki echoed his concern.

"I think that the misnomer that the dollars that are coming to school systems from the education lottery do impact a voter's decision at the ballot, whenever they are looking at a possible tax increase. Whenever the misperception is out there that these dollars are flowing into the public school system, and they believe the public school system may or may not be using them to their fullest extent," Swencki said.

Brunswick County voters already turned down a one-fourth cent sales tax proposal that would have helped fund new school construction.

Come November, voters in New Hanover and Pender Counties will consider school bonds that would address construction needs. Even if voters understand the lottery funding shortfalls, they may still not be convinced that counties need more money than they already have to solve the school construction dilemma.

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