Oklahoma lottery’s contribution to education reaches new low

As an effort gears up to restore funding to education through a 1-cent sales tax, we’re already hearing more Oklahomans ask a common question: Why hasn’t the lottery fixed our education funding problems? In a post from last year, we broke down the numbers to show that the lottery helps some, but the boost it provides is far less than what has been cut from other revenue sources.

Oklahoma’s Lottery Education Trust Fund contributed $65.4 million to the most recent state budget, divided between K-12 public schools, Career Tech, and higher education. Out of that $65.4 million, $29.4 million went to the state aid formula for public schools and another $6.5 million went to other funds that support K-12 education. Yet Oklahoma’s total funding for the state aid formula has been cut by $172 million since fiscal year 2008. The gain from the lottery is barely more than one-tenth what’s been cut overall.

Besides these other cuts erasing the gains from the lottery, another problem has emerged. The lottery’s support for education has fallen to a new low, and it’s projected to go down even further. Here’s the total funding going to the Education Trust Fund since the lottery was created:

lottery-contributions

After holding steady at close to $70 million for the first eight years of its existence, the Education Trust Fund dropped significantly in fiscal year 2014 and fell even more in fiscal year 2015. Projections by the Oklahoma Lottery Commission show that next year it’s expected to keep going down.

Why is this happening? The Oklahoma Lottery Commission’s Executive Director Rollo Redburn blames the requirement that the lottery contribute 35 percent of its profits every year to the Education Trust Fund, which he said prevents them from offering higher prize payouts. He said the mandated profit requirement has meant that they have had to gradually decrease payouts over the years, and that even flat payouts tend to become less appealing over time. He argued that removing this cap would lead to more funds going to education, because more generous jackpots would increase lottery sales. Lottery officials have lobbied for years to remove or reduce the profit percentage to education without success.

Another likely drain on lottery revenues is competition from tribal casinos. That’s not necessarily bad news for education, because casinos also contribute to Oklahoma’s Education Reform Revolving Fund (1017 Fund). In FY 2015, the 1017 Fund received $112.8 million from tribal casinos, and total fees paid by casinos to the state set a new record. The new record marks a comeback from last year, when the casinos’ contribution to the state fell for the first time since they were established in FY 2005. There’s some evidence that the gaming market in Oklahoma has reached a saturation point, so we can’t expect support from gaming to keep growing like it has over the last decade.

The lottery and gaming are helping to fund our schools, but these trends confirm that we can’t expect gambling to pick up the slack from Oklahoma’s overall disinvestment in education. There are no quick fixes to the fact that in good years and bad, Oklahoma is not bringing in enough revenue to maintain core services. The only question is how bad things will have to get for Oklahoma families before lawmakers begin to take this structural budget gap seriously.

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ABOUT THE AUTHOR

Gene Perry worked for OK Policy from 2011 to 2019. He is a native Oklahoman and a citizen of the Cherokee Nation. He graduated from the University of Oklahoma with a B.A. in history and an M.A. in journalism.

4 thoughts on “Oklahoma lottery’s contribution to education reaches new low

  1. We should not support Gov Fallin and the Republican congress in their pursuit of cutting taxes by passing a 1 cent sales tax to support schools. Make sure that no tax money goes to vouchers or schools for profit. Elect leaders that care about education in Oklahoma. Schools should not need to have fund raisers to keep their schools operating. The current administration and the elected congress are being pushed around by outside influences and do not know how to govern or maintain a credible budget. Vote Democratic. Make Oklahoma Great Again!

  2. Vote Dem and make OK great again? LOL LOL LOL LOL……….Obviously Arlene hasn’t look at what the country has been doing under the Dems rule over the last 7 years! Dems are corrupt liars that have taken this country to new lows all over the world! Look at every state that has a Dem governing it, they are all in debt up to their necks and most on the verge of bankruptcy! They all have sanctuary cities where ILLEGALS have more rights then citizens! And their schools are all failing! Under our last Dem governor, we lost lots of jobs including GM. But he made sure that the Oklahoman taxpayers spent millions to BUY the building that GM was in, then handed the building over to the federal government$$ If you want OK to look like CA, NY or IL, then yea vote a Dem in! Otherwise maybe the Dems should think about supporting their Rep governor instead of being obstructionists!

  3. Oh Connie…get your head out the sand already. Do you really think corruption and dishonesty begin and end at the party lines?

    The issue is the culture of politics in general. Mary Fallin is a terrible governor. She would still be a terrible governor even if she was a democrat. If the majority of voters would actually take the time research the candidates beyond what party they represent, Oklahoma would be in much better shape in education. Blindly voting along party lines is ignorant, irresponsible and lazy. California, New York and Illinois are all doing better than Oklahoma is in education. Why wouldn’t you want our situation to be like theirs?

    We keep cutting spending on students and teachers year after year and then act surprised when we have more than 1,000 vacant teaching positions at the start of the school year.

    Your closing comment about the democrats being the obstructionists to republicans is laughable. You clearly watch too much Fox News and have no idea what’s been happening in house and senate since Obama took office.

  4. Seeing that Democrats ran the State Education system forever prior to Janet Barrisi’ term. How can anyone point there finger at the other party and say you guys screwed it up or will screw it up? It doesn’t matter who’s in charge. It will always be poorly run because it’s run by the government. They are the most wasteful and inefficient bunch of people who couldn’t make it in the private sector. So with a group of govt workers running a state school system made up of thousands of other govt workers it’s always easy to say we are underfunded. Maybe they are. But I’ve yet to hear anyone speak out of the inefficiencies that exist in the system. Only that we are underfunded. Why are there so many districts that require so many administrators and assistants? What can we do to increase new teacher hires? I would rather see a outside private committee be given a chance to run the school system for a minimum of 5 years. If they recommend that more revenue is needed after they’ve made their changes in the system then so be it. But just whining year after year that your underfunded without making significant changes to the structure and makeup of the public school system will and should fall on deaf ears.

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