Gov. Pat McCrory wants legislators to let him use unanticipated extra profits from the North Carolina lottery in part for several new education initiatives and others that never before benefited directly from the state-run numbers games and scratch-offs.
McCrory’s budget adjustments for next year released this week would distribute almost half of the $62 million in additional projected lottery earnings for targeted scholarship programs, K-12 instructional supplies and technology to help raise University of North Carolina system graduation rates.
The surprise revenue comes on top of the $534 million the General Assembly already expected from lottery profits to spend in the fiscal year starting July 1 to offer prekindergarten to at-risk 4-year-olds, hire school personnel, build schools and offer financial aid for college to needy families.
Massive ticket sales from this year’s record $1.6 billion Powerball jackpot and strong instant ticket sales boosted profits, according to the North Carolina Education Lottery.
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“Like previous governors, Gov. McCrory has proposed investing additional lottery revenue to support his educational priorities,” Melanie Jennings, a McCrory spokeswoman, said in an email Thursday.
But no governor has proposed so many additional earmarks for lottery profits in the history of the North Carolina Education Lottery, which began selling tickets 10 years ago last month.
The 2005 lottery law directed legislators to distribute profits in specific percentages for only four specific education uses: school construction, pre-K, need-based scholarships and paying early-grade teachers. Lawmakers and governors routinely approved exceptions to the law, and during the Great Recession even used some lottery money to cover a Medicaid shortfall.
By 2013, McCrory persuaded lawmakers to allocate $12 million for classroom digital technology, and the General Assembly that year changed the lottery law to say profits only need go for “education-related purposes.” Legislators stopped providing digital learning funds from the lottery money the following year. Now McCrory is asking for $29 million of the extra profits so the State Board of Education can carry out a digital learning plan.
Many Republican legislators remain committed to keeping the profits going to the lottery’s original purposes.
“Every year at this point I go back and look at the original lottery legislation and make sure we’re spending lottery education money on purposes that the law describes,” Rep. Craig Horn, R-Union, an education budget-writer, said Thursday after an appropriations meeting examining the governor’s budget.
Horn acknowledged that House Republicans, who will present their own budget next month, may differ about whether to conform to the governor’s wishes.
“I think you’re going to hear more discussion on this,” he said. The Senate will create its own budget after the House does and a final compromise will be presented to McCrory.
The North Carolina Association of County Commissioners still wants lawmakers to return to the original formula in the 2005 law, which set aside 40 percent of net lottery profits for school construction. That would be more than double the $100 million they currently receive.
McCrory wants to spend $5.8 million from the excess lottery profits to give 300 more K-12 students with disabilities scholarships so they can attend private schools or receive therapy and other services. The program, which hasn’t received lottery funds before, was championed by Rep. Paul Stam, R-Wake, a longtime lottery opponent.
The North Carolina Education Lottery Commission has no role in deciding how the money is spent. Lottery Executive Director Alice Garland said in a release that what’s important to the lottery is that “North Carolinians can see where the money goes and that they believe it is going to good causes in education that benefit the state.”