CuriousCT: Does state lottery revenue support local schools?

Gregg Landry, whose question about state lottery proceeds interested many of those who responded to The Day’s first round of CuriousCT voting, said he wanted to know how much lottery money has made its way to local schools.

In a follow-up, Landry, 39, of Mystic, said he’d heard for years that lottery revenue supports "things like education" while a percentage of casino revenues helps fund roads and highways.

Not exactly.

After paying prize money, commissions to retailers who sell its products, operating expenses and contributions to problem-gambling programs, the quasi-public Connecticut Lottery Corp. in recent years has transferred about 28 percent of the revenue it generates to the state’s General Fund. In the 2017-18 fiscal year, that share was $345 million, according to the lottery.

None of the money is earmarked for anything specific, just the General Fund, which gets doled out to all kinds of things, including schools.

Turns out it wasn’t always that way, though.

From 1975 to 1977, revenue from the lottery’s first scratch game, “Instant Match,” funded education grants to cities and towns. In 1976, $1 million of the revenue from daily games was allocated to an emergency food relief program for people eligible for benefits under the Aid for Dependent Children program.

But since 1977, all lottery revenue forwarded to the state has ended up in the General Fund.

In the last fiscal year, the General Fund totaled more than $18 billion, most of it tax revenue. The fund also contained more than $272 million in “Indian Gaming Payments,” the state’s 25-percent cut of the slot-machine revenues generated by Foxwoods Resort Casino and Mohegan Sun.

Each year, a portion of the state’s share of the slots revenue is transferred from the General Fund to the Mashantucket Pequot and Mohegan Fund for distribution to each of the state’s cities and towns. The grants are based on a formula that considers the value of a municipality’s state-owned property; the presence of private colleges and general hospitals; population; grand list; and per capita income.

Nearly $50 million was transferred from the General Fund to the Mashantucket Pequot and Mohegan Fund last year.

Landry said he believes schools should get equal amounts of funding “so every town/school/student is on an equal playing field.”

“I would love to see public schools potentially be run federally so all towns/cities/states receive equal funding,” he said.

That’s certainly not how it works now.

In Connecticut, Education Cost Sharing grants, which come out of the General Fund, are the major form of state education aid to cities and towns and the biggest form of municipal aid of any kind in Connecticut. The state awarded more than $1.9 billion in ECS aid last year, taking into account each town’s property wealth and ability to raise property taxes to pay for education.

“Poor towns receive more aid per student; affluent towns receive less aid per student,” the state Office of Legislative Research said in a report.

Among southeastern Connecticut municipalities, projected ECS grants for the current fiscal year range from $61,597 for Lyme to nearly $32.4 million for Norwich.

Other education aid for towns includes General Fund appropriations for magnet schools ($310.2 million last fiscal year) and charter schools ($108.5 million), Tara Downes, a spokeswoman for the Office of the State Comptroller, pointed out. In addition, she noted, the General Fund pays the full cost of towns’ contributions to the state teachers’ retirement fund, which came to more than $1.2 billion last year.

“The bottom line is that the General Fund sends more to cities and towns for education than it receives from the casinos and the lottery,” Downes wrote in an email.

Last year, the Commission on Fiscal Stability and Growth, an advisory panel, recommended the state consider dedicating lottery revenues to the state's underfunded Teachers’ Retirement System.

Editor's Note: General Fund pays the full cost of towns’ contributions to the state teachers’ retirement fund, which came to more than $1.2 billion last year. This number was incorrect in the original version of this article.

Let us know what you want us to investigate in our latest voting round:


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