The frenzy over a $1.4 billion Powerball jackpot could be a windfall for the N.C. Education Lottery, but none of it will go to teachers.
In a little-noticed change during the 2015 budget session, lawmakers shifted distribution of lottery proceeds from teachers and assistants to bus drivers, janitors and other noninstructional support staff. A Senate budget writer said at the time that the shift would ensure that teacher salaries aren’t funded by a variable source of money.
Regardless of the shift, state lottery officials say no one will get big raises or a surge of staffing just because North Carolinians are lining up to get their shot at the world-record jackpot.
$1.4 billion Powerball jackpot if taken as annuity
$868 million if taken as a lump sum
76 cents from each $2 Powerball ticket goes to education
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Because revenue comes from all lottery games, it’s not even clear whether this year’s take will top the $529 million budgeted, said Van Denton, communication director for the N.C. lottery. And that’s only about 4 percent of the state’s education budget.
That money is budgeted for support staff ($310 million), school construction ($100 million), prekindergarten ($78 million) and scholarships ($41 million). On Monday, however, the Education Lottery’s website still listed classroom teachers and assistants as getting more than half the revenue, based on the 2014-15 budget. Denton said he plans to revise that chart “ASAP.”
Gambling vs. education
Since it was approved in 2005, North Carolina’s lottery has been controversial. Some lawmakers and citizens find gambling immoral and destructive, but for many people cash for education tilts the balance toward the positive.
Now gambling fever and hopes that education will benefit are both running strong.
While the scope of the education windfall remains unclear, “this is an exciting time for us at the lottery,” Denton said.
From Nov. 7, when the Powerball pot reset to the minimum $40 million, to Saturday, when it sat at $948 million, North Carolina sold $65 million in Powerball tickets. Saturday’s sales alone hit a record-setting $17 million, about six times the sales for one week earlier, Denton said.
With no winner Saturday, fantasies of becoming a billionaire have fueled further sales. The next drawing is Wednesday night.
62 percent of N.C. lottery money goes for prizes
26 percent goes toward education
7 percent goes to retailers
4 percent goes toward lottery administration
Most of the money that comes in, however, goes toward prizes and costs for running the lottery. For all games combined, just over 26 cents on every dollar goes toward education. For the Powerball, it’s about 38 cents, or 76 cents on every $2 ticket, Denton said.
That means the $65 million in recent Powerball sales translates to about $25 million for North Carolina’s education budget. But the net effect will depend on whether people are buying Powerball tickets instead of or in addition to other state lottery tickets – and on what happens during the remaining 5 1/2 months of the budget year.
Last year, state lawmakers wrangled over proposals to drive up lottery sales with new games, more ads and new ways to sell tickets. That generated more attention than the decision to shift profits from teacher salaries to noninstructional jobs.
A 2015 study found that North Carolina’s lottery, which is relatively young, is the only state-run lottery in the country to increase sales and profits each year of its existence. But the report by Delehanty Consulting also found that compared with five nearby states – Tennessee, South Carolina, Georgia, Kentucky and Virginia – North Carolina ranked last in lottery profits per capita, as well as advertising and marketing investment per capita, and sales per lottery retailer.
The report said North Carolina raised $48.59 per person for education, lowest among the six states. Georgia’s per-capita profit was the highest at $92.80, but that state has a lucrative keno game, with drawings every four minutes. The other four states had profits per capita ranging from $51 to $64.
Proposals to boost lottery sales drew significant support but didn’t make it into the 2015 budget, which wasn’t approved until 2 1/2 months after the July 1 start of the budget year.
Taylor Knopf of The (Raleigh) News & Observer contributed.