Powerball and other lotteries claim that ticket revenues go to fund state-run programs such as education, parks, emergency responders, veterans’ health, and other services.
But lottery proceeds don’t always get used for their stated purposes. And while about one third of all lottery money returns to state budgets, critics say the money tends to replace—rather than supplement—existing funding for the targeted programs.
“Money from the lottery generally substitutes money that would go to education anyway,” said Patrick Pierce, a political science professor at St. Mary’s College in Indiana. “After a few years, lottery money earmarked for education tends to find its way into a state’s general revenue pool.”
One prime example is North Carolina, which started its lottery in 2005, calling it the North Carolina Education Lottery. 100% of the proceeds go to fund North Carolina’s public education budget.
In the initial version of North Carolina’s bill establishing the lottery, the law said that, “lottery net revenues shall supplement rather than be used as substitute funds for the total amount of money allocated for those public purposes.” But that language was stripped from the final version of the bill.
California, Florida, and Michigan also have reduced spending on education over the past decade, allowing lottery funds to supplant existing funding. Other states, including New York, have actually increased spending on education despite using lottery revenues to fund schools.
Only 15 states use all or substantially all of the lottery proceeds for education, according to the latest statistics gathered by the North American Association of State and Provincial Lotteries.
Read more at CNN Money.