Oklahoma Lottery: Paying Off as Advertised?

By Alex Cameron, Oklahoma Impact Team

OKLAHOMA CITY -- If you're still wondering whether the Oklahoma Lottery is really helping fund education in Oklahoma, then you probably haven't seen the latest TV ad.

"Did you know that every time you play the Oklahoma lottery," says the voice of an apparently young child, "you're helping educate kids like me?"

Or, maybe you have seen the ad, and maybe you wondered -- as the Oklahoma Impact Team did -- if it is based in fact or fiction.

The executive director of the Oklahoma Lottery said the advertisement was put together a year ago in response to a growing chorus of skeptics -- people who doubted that any of the lottery proceeds were truly going to education.

The television spot, which was produced in Oklahoma City, claims that more than $300 million has now been raised for education through the lottery. Child actors then tick off an impressive list of education-related items that could have been purchased with that level of funding: 75,000 computers, 1.5 million library books, 450,000 microscopes, and 1,500 school buses.

Sounds good.

It is true that lottery proceeds for education have topped $300 million. What's not said, however, is that that's over four years, not one.

Former state legislator and lottery critic Forrest Claunch said it's all a bit misleading.

"The ads should say, 'We've averaged $67.8 million a year, and in any given year we could buy "x" number of buses, or whatever,' and of course they don't do that," Claunch said.

He also said that using the word "could" doesn't change the fact that even if lottery money could have paid for all those things, there would be no way for school districts to prove it.

"They can't tell you exactly how much money came to them through the lottery," Claunch said. "That's not the way it's dispersed. Most people don't have a clue where the money's going."

By law, 35 cents of every dollar spent on a lottery ticket does go to education. Of that, 45 percent goes to common education. Last year, that amounted to about $30 million in lottery proceeds for public education in the state.

The lottery money is going to education, as promised. But -- and this is where the TV ad and the supporting story begin to diverge from what was promised -- that money isn't kept separate from other common education funding, it's thrown in with all the state formula money.

"At which point it loses its identity," said James White, assistant state superintendent for financial services, "so, when people say 'how much is "x" school getting?'...it's very hard to tell."

White says last year a task force studied the possibility of making it less "hard to tell," by not throwing the lottery money in with the formula funds. But, he says, they decided against it.

"The problem with that is," White explained, "once we pull $30 million out of the formula, we have to find a new source of revenue to replace that $30 million into the formula."

Lottery funding for education, it would seem, has become just what the original advocates of the lottery said it would not become -- a baseline funding stream.

"The educational lottery was never intended to replace state funding for education, just be new, additional money," said State Senator Richard Lerblance, D-Hartshorne.

But Senator Lerblance, who sponsored legislation this session to try and increase the lottery's contribution to education, said he doesn't see the need to track lottery funds any differently than other baseline funding streams.

Read Senator Lerblance's Senate Bill 1279

"Do we track every dollar, where it's spent?" Sen. Lerblance asked. "The money that goes to Corrections, the money goes to Public Safety, the money goes to Mental Health, the Department of Human Services -- we don't track those dollars like that."

One person who wishes the state would track the dollars more closely is Jim Scroggins, the executive director of the lottery, who said he's frequently asked how much lottery money is going to a specific school.

"Ideally, I'd like to be able to say to anybody -- tell me your school district and I can go find out exactly how much your school district's getting, but we can't do that," Scroggins said.

State education officials have been able to provide estimates, after the fact, of how much lottery money each school district has received. For example, they estimate Jenks public schools got about $450,000 from the lottery in FY 2009, while Norman schools got approximately $659,000.

See an estimate of how much each school district received from the lottery in FY 2008 & 2009

Those are significant sums of money -- enough, you might think, that those districts really could have purchased some school buses or computers. The problem is, since that money was combined with formula funds, it got treated like formula funds, meaning about 85 percent of it went to paying salaries.

"If you're spending 85 percent of the funding that you're getting from the lottery commission on salaries, you're not spending it on school buses or books or computers, and that alone means the ad is misleading," said education consultant Amy James.

See this fiscal year's lottery appropriations for education

See past fiscal year's lottery appropriations for education

Scroggins said the ads are not meant to be misleading.

"We don't want to mislead anyone," insisted lottery director Scroggins. "The whole idea is to try to be able to say to people here in Oklahoma, 'Yes, your money is going to education and it's doing good things.'"

In addition to those who believe the ad is misleading, others believe its use of children to promote the lottery -- gambling -- is inappropriate. Representative Harold Wright, R-Weatherford, is pushing a bill this session that would prohibit that in the future. It easily passed out of committee earlier this week.

Read Representative Wright's House Bill 2956