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Bill proposed to increase Oklahoma lottery contribution to education by $110 million

OKLAHOMA CITY –Legislative budget leaders have filed a bill projected to increase the Oklahoma Lottery’s contribution to education by $110 million over the next five years.

House Bill 1837, by House Appropriations Chairwoman Leslie Osborn and Senate Appropriations Chairwoman Kim David, is designed to send more lottery revenue to education by letting the lottery offer larger payouts that improve lottery sales and ultimately send more money to public schools.

“Education gets more than $100 million in new lottery money if this legislation passes. This is by no means an end-all, be-all school funding solution, but it is an achievable way to get more money to schools even in a tough budget year,” said Osborn, R-Mustang.

Background:

The Oklahoma Lottery has sent more than $750 million to education since it began in 2005, but its performance has been declining – particularly in comparison to other state lotteries – because of an ineffective profit requirement that would be replaced under HB 1837.

“Like the lottery or not, we can all agree that since we have one, we should make it work the best it possibly can for our schools,” said David, R-Porter. “There is a lot more to do on education funding this session and long term, but this is one improvement that can be made now for our schools.”

Oklahoma Lottery revenue to education peaked at $71.6 million in Fiscal Year 2008, but has declined since.

If HB 1837 is not passed, the Oklahoma Lottery projects those declines will continue and that education will lose a combined $25 million in lottery funding over the next five years.

If it is passed, budget leaders say HB 1837 will make the lottery more profitable and will increase common education’s lottery funding through three steps:

1. Guarantee at least $50 million in lottery revenue for education every year.
2. Send profits above $50 million to specific K-12 public school initiatives.
3. Improve sales and lottery revenue to education by ending the counterproductive mandate that 35 percent of profits go to education.

The Oklahoma Lottery projects specified K-12 public school initiatives would receive $85 million over the next five years if HB 1837 is enacted.

The money would be used for initiatives in reading and science, technology, engineering and math (STEM).

HB 1837’s $110 million boost to education comes from preventing the $25 million decline that is expected without the bill and sending the projected $85 million to reading and STEM programs.

“The bill makes sure lottery revenues to education not only never fall below next year’s baseline, but grow over time by generating stronger lottery sales to send more funds to education,” said Oklahoma Lottery Executive Director Rollo Redburn.

The Oklahoma Lottery, because of its profit requirement, lags behind other state lotteries in per capita sales, coming in at $44 per capita. The national lottery sales average is $216 per capita.

Many states don’t place percentage requirements on lottery revenues like Oklahoma does, which allows those lotteries to perform better and ultimately produce more funding for the governmental functions they support.

“The dynamics are pretty simple: When Oklahoma Lottery sales slow, education gets less, and when we improve sales under this bill, education gets more,” Redburn said. “The approach proposed in this bill is a proven way our peer lotteries around the country have used to provide better financial support to important state functions like education.”

In 2007, North Carolina removed the profit requirement for its lottery and saw lottery funding to education rise by $318.7 million, or 101 percent, over the next nine years.

The Arkansas Lottery has no profit requirement and its per capita sales were $138 in 2015, compared to $44 in Oklahoma.

Pennsylvania, Texas and California have also removed lottery profit requirements and grown sales, allowing those lotteries to send more money to the governmental functions they support.