Last month, Gov. Jay Nixon announced he would withhold some $1.1 billion from the state’s fiscal 2015 budget ahead of the General Assembly’s veto session. The move drew the ire of local education officials at Missouri State University – which stands to have $4 million shaved from its budget – as well as K-12 educators across the Show-Me State, who stand in limbo with their own budgets as a new fiscal year dawned July 1.
Amid the bickering, Missouri Lottery officials announced their contributions to public education are now approaching $5 billion.
In fiscal 2014, the Missouri Lottery generated $267.32 million – its third largest level of support since games, such as Lotto and Pick 3, made their debut in 1986.
Lotto’s launchMissouri Lottery spokeswoman Susan Goedde said the state lottery began in the mid-1980s after many voters who thought they were approving a measure that helped fund educational initiatives were, with their votes, just bolstering the state’s general fund with lottery proceeds.
“They talked a lot about money going to education, but what was approved at the ballot on Nov. 6, 1984, was Amendment 5, and that was earmarked for the general revenue fund,” Goedde said. “A good deal of the general revenue fund – anywhere from 30 to 45 percent – went to public education, but that varied from year to year.”
State residents who thought all the proceeds would be devoted to education became disgruntled, Goedde said, and lawmakers responded with Amendment 11 in August 1992. Approved by 78 percent of voters, the amendment earmarked all monies for public education via a separate lottery proceeds fund, which went into effect Jan. 1, 1993.
“We raise as much money as possible, but each year, legislators determine what [educational] programs will be funded and how much,” Goedde said.
That shakes out to almost 25 cents of every lottery dollar benefiting Missouri’s public education programs, according to MoLottery.com. Lottery players receive the greatest payouts, about 65 cents of every dollar spent on games, while retailer commissions, incentives and bonuses represent 6 cents of every dollar and nearly 5 cents on the dollar covers administrative costs.
In fiscal 2013, the most recent expenditure list available, Greene County elementary, secondary and higher educational institutions received $16.6 million from games such as Show Me Cash, Mega Millions and an ever-changing portfolio of scratcher tickets. MSU, for example, received $7.4 million, while K-12 schools directly garnered $4.1 million and programs such as A+ Schools – which secured $3.2 million – also got their share.
Springfield Public Schools Superintendent John Jungmann said a portion of the funding-formula money comes through a line item called the Classroom Trust Fund, which includes all lottery and gaming funds.
“Last year, SPS received just over $9.5 million from this revenue source, which represents approximately 20 percent of our state formula payment,” he said in an email.
The budget pieDespite a dedicated source of funding from the Missouri Lottery, public educators statewide are still stretched too thin, according to Missouri Budget Project officials.
Earlier this year, the St. Louis-based research organization that works to shape public policy teamed with the Department of Elementary & Secondary Education to quantify the shortfall Missouri’s 520 school districts faced in the past year based on a funding system lawmakers established in 2005. The foundation formula was adopted to ensure districts were adequately funded to meet the state’s educational standards. Missouri Budget Project’s review found the shortfall for fiscal 2014 was $656 million, and two out of three districts were underfunded by $800 or more per student.
Traci Gleason, the nonprofit’s communications director, said underfunding the foundation formula makes the state less competitive because a better educated workforce attracts outside investments. She said policy decisions such as tax cuts and an overall lack of available revenue have educators scrambling for their slice of a diminishing pie despite the support of state gaming revenues.
“Over the course of a few decades, we have less general revenue coming in per capita than we did before. And Missouri’s spending as a percentage of the economy is less than it was in 1981,” Gleason said.
According to budget data collected by the Missouri Budget Project, general revenue spending represented 3.6 percent of the state’s gross domestic product in 1981, before climbing to a high of nearly 4.5 percent in 1997 and then falling to roughly 3.3 percent in the most recent fiscal year.
“Our state general revenue isn’t going to reach its prerecession levels of 2008, in terms of spending power, until fiscal year 2029,” Gleason said. “While we can talk about how we are increasing [spending] on various services, that doesn’t account for inflation or that those services become more expensive to provide.
“We’re fighting for crumbs at this point.”
Advancing educationIn fiscal 2014, the foundation formula – which called for 35 percent of general revenue to go toward K-12 education – received $3.08 billion, or about 17 percent below the prescribed level. Gleason said the plan lawmakers originally outlined in 2005 had the formula fully funded by fiscal 2013, but the grip of the recession had not yet been felt.
Earlier this year, Nixon’s proposed budget called for increases in educational spending of nearly $250 million, and the budget plan forwarded by House and Senate leaders this session called for educational spending increases of around $200 million. But that was before the governor took executive action last month that he said was necessary to ensure a balanced budget. In late June, he shaved nearly $276 million in line-item vetoes from the state’s overall budget and $846 million in temporary withholdings, which could be released later – a move some educators and business groups such as the Missouri Chamber of Commerce and Industry scorned as political posturing in advance of the veto session.
Whatever happens, Goedde said she feels confident the Missouri Lottery will continue to play an important role in the state’s educational system.
“No matter what, the lottery is still offering $267.3 more than if the lottery didn’t exist,” Goedde said.
SPS’ Jungmann agreed.
“Without the lottery funds to help bolster state revenues, the Missouri legislature would need to find other sources of revenue to support schools or districts would be forced to operate on even further reduced levels of funding from the state,” he said.
