Does The Texas Lottery Fully Fund Public Education?

Under state law, lottery revenue — including ticket sales and money from unclaimed prizes — must contribute to Texas causes and programs. However, only 27 percent of that money goes toward Texas education.

by Alex Samuels

The lottery is supposed to fund education — that was stated at the get-go. Why is lottery money being used for other things?

When they were trying to sell the lottery to voters more than 25 years ago, political candidates left many Texans with the impression that 100 percent of the money earned from the lottery would go toward education and that the lottery might generate enough money to pay for all public education.

Neither is true.

Through a constitutional amendment, voters approved the creation of the Texas Lottery in November 1991. Between 1992 and 1997, $4 million from lottery ticket sales and unclaimed prizes went toward the state’s general revenue fund — meaning it could be used for any state expense.

It wasn’t until after 1997 that Texas schools became a specific beneficiary of the money.

The breakdown of how that money is distributed now looks like this, according to the Texas Lottery Commission website:

• 63 percent is paid to lottery winners
• 27.1 percent funds Texas education through the Foundation School Fund
• 5.4 percent goes toward retailer commissions
• 4 percent goes to the lottery for administrative costs
• The remainder, about 0.4 percent, funds the Veterans Assistance Program and other state programs 

The commission announced in September 2016 that it had earned more than $5 billion in sales for the 2016-17 fiscal year.

“This is the first time in our history that we have generated more than $5 billion in sales,” Gary Grief, the lottery’s executive director, said in a news release. “We are excited to celebrate the extraordinary growth we have achieved and proud to make our largest contributions ever to both Texas public schools and veterans’ programs.”

Of that $5 billion, roughly $1.3 billion was allotted to the Foundation School Fund, which is administered by the Texas Education Agency. The money is used for expenses such as teacher salaries, bilingual education and special education.

TEA officials said the Foundation School Program should be thought of “as a huge pot of money” with lottery revenue being just one contributor to the pot.

In 2015, the Legislature budgeted $48.4 billion in state funds for public education over two years, which included $2.4 billion that the lottery contributed to the state’s foundation school account.

According to the Texas Lottery’s website, the lottery has contributed $20 billion to the Foundation School Fund since 1997. But TEA officials say there’s no telling which Texas school districts receive lottery funding.

The bottom line: The money earned by the Texas Lottery has never been fully dedicated to Texas education. Since 1997, a percentage of lottery revenue has gone toward funding the state’s public schools, but not all of it.

This story originally published by The Texas Tribune.