Misleading Article About Oklahoma Lottery Funds Supplanting Education Funds

By Wesley Fryer On January 10, 2012 · · 2 Comments

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Today’s NewsOK article, “Lottery paid $400M to Oklahoma schools” by Megan Rolland is very misleading in addressing the issue of lottery funds “supplanting” rather than “supplementing” state education funds. Megan notes correctly:

The lottery law stipulates that the money is not supposed to supplant current education funding but is supposed to be in addition to education funding.

Megan does NOT, however, highlight the fact that lottery funds HAVE been used to supplant education funds. From what I understand, since the lottery was enacted (all ‘in the name of education’ and ‘for the kids,’ don’t know you know) education funding in Oklahoma has been flat. I’d like to see these specific numbers in an auditor’s report or research journal. Certainly our education funds have not increased statewide by $400 million in six years. The way lawmakers have done this has been to intentionally obfuscate the funding process for lottery dollars.

In the article Rolland quoted Oklahoma City Public Schools superintendent Karl Springer. She wrote:

But the money was never tracked properly, Springer said. The lottery law stipulates that the money is not supposed to supplant current education funding but is supposed to be in addition to education funding. The contribution is split with 45 percent going to prekindergarten through 12th-grade education, 45 percent going to support capitol projects for higher education, 5 percent going to the state’s school consolidation fund and the final 5 percent going to the teacher retirement system. For higher education, the money is easily tracked and there is a list of capitol improvement projects that the lottery has funded at colleges and universities across the state. But for common education the money goes directly into the state formula that distributes funding equally between school districts based on a student enrollment equation.

These statements by Springer ARE accurate. What’s confusing, however, is the quotation Rolland attributed to Springer just prior to that paragraph. Her quotation of Springer was:

It [the Oklahoma lottery] has generated $400 million that this state otherwise wouldn’t have had for schools.

This is a confusing quotation because it’s inaccurate. I wonder if it was a mis-quote. It would be true to say, “The Oklahoma lottery has generated additional revenue which would not have been otherwise brought into state coffers.” It is NOT accurate to say, “Our schools would have been $400 million poorer the past six years without the lottery.” By law state officials were supposed to use lottery funds to INCREASE (the technical word is “supplement”) education funding rather than keep it flat. Again, however, my understanding is that state officials have kept funding flat. They have used lottery funds to replace general revenue funds in direct violation of the letter of the lottery law, which prohibits supplanting education dollars with gambling profits.

If my understanding of this situation is inaccurate please enlighten and correct me. Again, I’d like to see the total amount of Oklahoma legislature allocated dollars for education for the past six years in absolute dollars, and also see those numbers adjusted for inflation. My understanding and expectation is you will NOT see in either set of statistics an increase of $400 million over the past six years. Yet if Oklahoma legislators had followed the law which was passed, that’s exactly what we SHOULD see.

According to numbers reported by sunshinereview.org, our state education budget in 2011 was $3.6 billion. It is not clear what that total number was in past years, however. According to the Oklahoma Policy Institute’s October 2011 report, “The Oklahoma Education Lottery,” lottery funds have been put into the general fund rather than put directly toward education.

[OKLAHOMA] Lottery net proceeds are divided between several education agencies as set out by the statutes. For the most part, lottery revenues have been blended with other revenues to support general operating expenses, rather than being dedicated to any distinct, ongoing, and identifiable purpose. Current year (FY ’12) appropriations includes $63.1 million of lottery revenues out of total state appropriations of $6.5 billion, or 1.0 percent

This is certainly NOT the message communicated by the official Oklahoma state lottery page for education, which paints a misleading picture that education funding in our state has increased because of the lottery. This is FALSE and misleading.

We do need accountability in Oklahoma education and politics, and this situation with lottery funds supplanting public education dollars is a perfect place to demand it as citizens. I’m confused by the way these issues of lottery funds “supplanting” rather than “supplementing” were addressed in this NewsOK article today. That is frustrating, but it’s also frustrating to see the unnecessarily complicated way our state legislators have created a funding formula which makes it impossible to “track the dollars” for K12 spending. This is a clear example of intentional, legislative, budgetary obfuscation. That’s a complex way to say, “our elected officials are cooking the books to hide illegal actions.”

If I’m wrong here, please explain why and let’s analyze the real state education budget dollar totals together. I think I’m on track, however, and it’s extremely disappointing to see how voters in Oklahoma were misled and CONTINUE to be misled when it comes to the lottery.

The Oklahoma lottery has NOT been a “win” or a “financial boon” to K12 schools. Instead, it’s been yet another case of politicians acting in ways which LOSE rather than win public trust. The lottery should have brought $400 million MORE dollars to our public schools in Oklahoma in the past six years. It hasn’t, and we should demand our legislators remedy this situation rather than continue a funding process which makes the financial details surrounding the lottery and schools murky and confusing.

When I posted the following image to my Photo 365 blog last year, I titled it, “A Legislative Obfuscation.”

This was a billboard in Oklahoma City just outside Will Rodgers airport. Reading today’s article about the lottery, we can see this billboard presents a misleading message to an all-too-often naive public. Rather than saying “more than $400 million has been contributed to Oklahoma education through the lottery,” the sign should truthfully read:

More than $400 million of funding to Oklahoma schools has been illegally supplanted by the state lottery, in violation of the promises made by lawmakers to the public and in direct violation of the letter of the law.

Technorati Tags: oklahoma, lottery, funding, misleading, newsok, politics

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Jane Citizen

Thank you for reminding me about the whole supplanting/supplementing thing! I totally sped right past it: It [the Oklahoma lottery] has generated $400 million that this state otherwise wouldn’t have had for schools. I haven’t had a chance to check the numbers for a six-year comparison (which will be difficult b/c official sources usually run 2 years out) but I will, and will get back to you.
Thehero

First of all, I appreciate your effort to shine some light on this lottery issue. There are several matters the general public does not know. Here’s what the legislature did back in 2006 that schools are upset about. First, the legislature raised the state minimum teacher pay scale by some $3,000. So in other words, they gave most teachers a $3,000 pay raise. What they didn’t do is fully fund this pay scale increase. They only funded about 2/3rds of the actual cost with “state” dollars and basically told schools to cover the rest. Of course, the only new money schools had available was a little new local (property tax) money and lottery proceeds to cover the other 1/3rd of this cost. Technically, this wasn’t supplanting since they did increase educational funding with some “new” money to cover some of this pay increase. However, what also did occur was the legislature passed on a large underfunded mandate and liability to school which was a pretty sleazy thing to do.
Another issue is that the legislature decided to commingle lottery funds with the state education funding formula pot of money. The state educational funding formula pot of money is the $2 billion pot of money that is distributed to schools. Once funds go into this pot of money, they lose their identity. Funding from this pot of money is distributed to school districts based on the district’s weighted average daily membership. There are school districts in Oklahoma that receive little, if any, state funding formula money and this, little if any lottery money. Is this fair? No. Something similar happened a little over a decade ago when the first $3,000 pay raise was given to teachers. The funding of this raise used to come to schools in a separate allocation. If your school district had 100 teachers, your school district received an allocation from the state for $3,000 per teacher plus the FICA cost. The legislature moved this funding into the state education formula money and it has now lost its identity. Think about this. The pay raise funds are now distributed to schools based on the funding formula, which is determined by the the number of weighted students they have, not the number of teachers. Again, some districts receive no formula money so they don’t get any funds for that pay increase. The state also doesn’t have to fund any increase in the number of teachers over the year that way either.Here’s what should have happened with the lottery proceeds. First, the lottery proceeds should have been banked for a year. That way the state would know exactly how much lottery funding is available for distribution, not based on estimates like it is now. Second, lottery proceeds should be put in a separate account that the legislature couldn’t touch. Third, the lottery proceeds should not be distributed to schools through the education funding formula. Lottery proceeds should be distributed to schools based on regular average daily membership, not weighted ADM. Schools with higher poverty levels tend to have higher weighted ADMs These schools already receive additional funding through both federal and state monies. They should not be benefit additionally from lottery money at the expense of other school districts. Those are my thoughts.