Does the Texas Lottery Fund Texas Schools?

Underneath the logo of the Texas lottery ticket is the phrase: “Supporting Texas Education and Veterans.” But is that really true? And if it is, why don’t we have enough money to sufficiently fund our public schools?

The Texas lottery does support Texas education and veterans.  That much is true, technically. But like many decisions made in Austin, there’s some fine print involved.

To start with, the majority of revenue from lottery ticket sales- about 63%- goes to payouts for the winners. And that makes sense: if the jackpot isn’t big enough, no one would buy the tickets to begin with. The second largest percentage- about 27%- goes into the Foundation School Fund, which administers state funds into our classrooms on a weighted per pupil basis.

[If you want to learn more about the complex way that the state distributes school funds, go here]

Just over 5% goes to the retailers who sell the tickets, and 4% covers administrative costs. Which leaves about 0.4% for the Veterans Assistance Program. So, yes, the Texas lottery supports Education and Veterans, if not exactly in equal measure.

So then how much money does the lottery actually send to education, and why isn’t that enough?

Well, in the 2016-17 fiscal year, the Texas Lottery Commission reported $5 billion in sales; that means the Foundation School Fund saw an influx of $1.3 billion. That’s no small chunk of change.  But Texas educates 5.4 million public school students. Educating that many students costs a lot of money, even when our per student funding is 43rd out of 50 states. In 2015, lawmakers budgeted over $48 billion for the upcoming biennium.

That means the lottery’s contribution of $2.4 billion over that same period accounted for about 5 percent of the total education budget. Or, put another way, about four weeks’ worth of classes. Which means we’d have to buy a lot more lotto tickets before it started covering all of our costs.

But before you run out and try and scratch your way into a school finance fix, there’s something else you should keep in mind. Education is primarily funded through property taxes, and if property values in a certain district reach a certain level, some of those tax revenues are re-distributed to other districts in a system known as “recapture.” Much like those lottery funds, money collected in “recapture” is statutorily dedicated to funding public schools.

But when the legislature sees how much is coming in each biennium, from both recapture and the lottery, they can then choose to move other state revenues, like sales or franchise taxes, out of public education, keeping the total amount being invested in education the same. Despite rising property values across the state, and growing lottery ticket sales, the amount invested per student has remained virtually unchanged for more than a decade.

Ultimately, if we want accountability in the way our dollars are spent, we have to demand it.

One more thing: if someone wins the lottery and doesn’t collect, which apparently has happened to the tune of over $600 million over the years, there’s no guarantee that money goes into education, or veterans’ services.  It simply goes into general revenue.

If you want to make your voice heard during the next legislative session, and be an advocate for our public schools, you can sign up at InvestEdTX.org to be connected with your legislator.

Making change may seem like a long shot.  But we’ve got better odds than winning the lottery.