The Texas Lottery Commission reported record sales of about $3.8 billion for the 2006 fiscal year Monday. Nearly $1 billion will go to public schools this year but may not make a significant difference in school districts' budgets.
Established in 1992, the Texas Lottery originally funneled money into the state's general revenue fund, which provides funding for most state agencies. Since 1997, however, the lottery has raised money specifically for the Foundation School Fund, operated by the Texas Education Agency, which distributes aid to school districts across Texas.
The Foundation School Fund serves as the primary method of funding for the education agency and is based on a three-tier system to ensure equitable distribution, according to the Legislative Budget Board's Fiscal Size-Up 2006-07.
But there are misconceptions on how the money is spent, said a budget board staff member who refused to be named, because he could not speak on the board's behalf.
"The lottery money does not supplement current state spending on education. It simply allows a billion dollars of general revenue funds to be spent elsewhere in state government," the staff member said.
According to the Fiscal Size-Up 06-07, lottery revenue is also a small fraction of the education agency's budget.
For the 2006-07 budget cycle, $34 billion was allocated to the education agency of which, roughly $22 billion, or 65 percent, came from the fund, according to the report. The report also estimated lottery revenue would add $2 billion for 2006 and 2007 to the Fund.
Of total lottery revenue, 60 percent is paid out in prizes, and 28 percent goes to the Foundation School Fund, with the rest going to miscellaneous expenses such as vendor
commissions, said Robert Elrod, a spokesman for the commission.
Since 1997 lottery proceeds to the fund total $8 billion, according to the Texas Lottery Commission Web site.
A specific legislative formula guides education agency funding to school districts, said Ruben Olivarez, a former superintendent for San Antonio Independent School District and current UT professor.
"It's based on the average daily attendance rate," Olivarez said. "If you have 100 students, and the state is going to give you $5,000 per student, but at the end of the year if you have a 92-percent attendance rate, the state is only going to pay you for 92 percent of 100 students."
Additional factors can be included in the funding formula, such as the percent of migrant students and those with limited English proficiency, Olivarez added.
The commission topped $3.77 billion in 2006, breakingthe $3.74 billion record in 1997, Elrod said.
"A lot of it has to do with our games, especially the scratch-off games," he said.
At any given time, the lottery has nearly 80 games on the market and works hard with vendors to rotate games, Elrod said.
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