RICHMOND, Va. – There is a record jackpot up for grabs, and no one has had a hard time fantasizing about how to spend the millions, but it’s been a while since people have talked about how the state gets its share of lottery money -- especially the cut people assume goes to state schools.
The record jackpot is now larger than Powerball signs can post, with the potential prize at an estimated $1.4 billion. That cash will certainly benefit the winner, and to some extent, it will go towards funding education here in Virginia.
"No question that there will be additional dollars going to public education because of this huge jackpot,” Paula Otto, the Virginia Lottery Executive Director, said.
But the lottery has no control over how the General Assembly spends lottery proceeds on educational programs.
Wednesday's drawing alone could generate nearly $30 million in profits, but that doesn’t mean profits will go directly to beleaguered school systems.
In 1987, the lottery was pitched as a way to support education, though legislation didn’t specify it would actually be used for that purpose. Then in 2000, an amendment specified a 60/40 split; 60 percent swapped out for the money the state would provide for education, regardless. So the money was freed up for politicians to use elsewhere.
The remaining 40 percent was “promised bonus funding,” and it helped build schools and go toward nonrecurring expenses.
That split doesn’t exist anymore.
The Virginia Lottery says that all lottery profits are to “be used solely for educational purposes.”
Some educators are angry because they believe not enough state lottery money ends up in local coffers but is instead diverted to help pay for state programs.
They argue it is being used as tax dollars, and instead of supplementing funding, the General Assembly is supplanting education. Educators said that the money is dropped into a general fund which allows lawmakers to use the money for a subset of educational programs like the foster care and the school breakfast programs.
In fiscal year 2015, after players got prizes, retailers got rewards, and the lottery covered its operational expenses, the lottery says on its website that almost 30 percent went to public education K-12.
For example, of the $1.84 billion generated by lottery sales in 2015, the lottery claimed that $533 million was given to public schools (Not all proceeds earned in a fiscal year are appropriated in that year.)
That amount is just nine percent of the state's overall education budget, Pyle said.
"Educating our students has gotten tougher, but the amount of money we're getting our students has decreased significantly,” Meg Gruber President Virginia Education Association said.
How the money is distributed is determined by the General Assembly in the annual Appropriation Act, and the specific formulas used to distribute lottery funding vary by locality.
"School divisions used those lottery proceeds to build schools, to make other capital improvements,” said Charles Pyle, with the Virginia Department of Education. “Since 2009, the General Assembly has used the lottery proceeds to fund some specific programs.”
In 2015 the biggest allotment went to K-3 primary class size reduction payments. Over $113 million went to providing incentives to school divisions for reducing class size in primary grades. The second highest expenditure went to funding “at-risk add-on” programs and the third went to special education.
“If the General Assembly wanted to do something different in terms of how it appropriates the lottery proceeds to school divisions, well the General Assembly can do that,” Pyle said.
“The funding formula doesn’t provide the actual costs for the locality to actually give that quality education,” Gruber said.
"State PK-12 funding bottomed out in FY 2012 but has been increasing since," Pyle said. "However, we are still below where we were in FY 2009. About seven percent below when you compare total direct aid (general fund and non-general fund) for FY 2015 with FY 2009."
