Wednesday, July 18, 2012

Lottery Two-Step Alive and Well

I've been on vacation for the last few weeks with my family. It was great fun and very, very hot. But I'm so glad to be back in Ohio where it's, well, very, very hot. Like I never left.

Back to work...

Remember not long ago how Ohio School Districts were told that gambling interests would come to their financial rescue? Well, my friends at noticed something interesting: despite record Ohio Lottery profits, school districts are seeing no additional revenue. How is this?

It's something I call the Lottery Two-Step. Others more familiar with government finance-ese will understand it as "supplantation". When the Lottery was created in the 1970s, one of it's major flaws of its creation was not restricting the ability of politicians to supplant General Revenue Fund money in schools.

What does that mean? It means legislators and governors routinely remove General Revenue Fund money from schools and replace it with the same amount of Lottery money, which means schools receive zero additional financial benefit from the Lottery money. It also means that other areas of the budget receive the benefit intended for schools by the People of Ohio.

I should make it clear this is a bipartisan problem, though some have been more willing to admit what the state does than others who deny it. The fact is that the language of the Constitution does not forbid the Lottery Two-Step.

Another interesting tid-bit in the Plunderbund post, though, is the amount that was accumulated by the Lottery this year. It was $771 million -- a record. What's fascinating is that Charter Schools received a total of $771 million from the state this year too.

What's that mean for traditional school districts? Even if the state weren't supplanting General Revenue Fund money with Lottery money, all the Lottery money is eaten up by Charter Schools anyway.

So either way, school districts receive no additional benefit from the Ohio Lottery, whose funds (and resulting additional financial benefit) were intended to serve as a financial savior for traditional public schools.

The Lottery Promise made four decades ago in Ohio reminds me of this exchange from the movie version of Charlie Wilson's War:
“A boy is given a horse on his 14th birthday. Everyone in the village says, “Oh how wonderful.” But a Zen master who lives in the village says, “we shall see.” The boy falls off the horse and breaks his foot. Everyone in the village says, “Oh how awful.” The Zen master says, “We shall see.” The village is thrown into war and all the young men have to go to war. But, because of the broken foot, the boy stays behind. Everyone says, “Oh, how wonderful.” The Zen master says, “We shall see.”
Will Ohio's leaders ever treat the Lottery money the way it was originally intended?

We shall see.