State Lawmakers Allegedly Misappropriate Some Lottery Funds

For the first time since voters approved the state's so-called “education lottery” more than a dozen years ago, lawmakers are accused of misappropriating some of the lottery's proceeds. This could make the current revenue challenge even worse.

The law that created the lottery laid out how the proceeds of the lottery had to be divided up - between common ed., higher ed., and career tech. It also spelled out very clearly that these were not ever to be used to replace, or supplant, regular state funding for education.

It's the Board of Equalization's job to make sure that doesn't happen. As you know, the Board met Tuesday, and this was perhaps lost in the announcement of the state's latest revenue failure.

This is from the revenue certification packet released Tuesday, and there on page five, it shows the board determined the Legislature used $10-plus million dollars in lottery funds to 'supplant' regular education funding for the current fiscal year.

Responsibility for this breech of law falls to last year's budget writers, while responsibility for correcting it falls to this year's budget writers.

The law states, when a determination of supplanting is made, the legislature must pay back the amount supplanted. In this case, 10.1 million dollars to the lottery trust fund.

In a statement, Senate Appropriations Chair Kim David said: "I disagree with the methodology that was used to make that determination. The simple fact is the Legislature made a policy decision to cut the budget of higher education, and didn't supplant funding for common education. The cut to higher education skewed the numbers."

House Appropriations Chair Leslie Osborn said they are working with budget and legal staff to figure out how best to address the finding in accordance with state law.