Plastered on highway billboards and gas station windows and doors, the image is familiar to many Virginians: A white cartoon hand with crossed fingers laid over a green background.
It’s the logo of the Virginia Lottery.
With the lottery hosting programs like “Thank a Teacher” and sporting slogans like “We’re game” and “We’re game for education,” it’s easy to see that lottery proceeds somehow benefit Virginia schools.
But how does it work?
Here’s a breakdown, a brief history of the Virginia Lottery and a look at how local schools have benefited.
In fiscal year 2018 — from July 1, 2017, to June 30, 2018 — the Virginia Lottery reported ticket sales of $2.1 billion. Sixty-one percent of this, according to the Virginia Lottery website, went back into the prize pool, 6 percent paid commissions to the establishments selling the tickets and 5 percent went to operational expenses.
The remaining 28 percent — more than $600 million in profits, according to the Virginia Lottery website — will go to educational funding in state public schools.
Unclaimed prizes also go to the Literary Fund, which grants low-interest loans for school construction and supports teacher retirement funds, among other things, according to the Virginia Department of Education’s website.
Of the $600 million, Newport News Public Schools received nearly $22 million in fiscal year 2018, said Michelle Price, spokeswoman for NNPS.
In turn, Hampton City Schools received more than $14 million in the same time frame, said Kellie Goral, spokeswoman for Hampton public schools.
Generating more than $36 million in a single year isn’t a bad track record, but that hasn’t always been the case. For many years, public education only sometimes benefited from lottery proceeds.
The early days of the lottery
Since its creation in 1988, the Virginia Lottery was believed by many to be a benefactor of public education.
According to a write-up by the National Gambling Impact Study Commission, those beliefs were founded on “advertising” and “public statements by state and lottery officials.”
But for nearly a decade, the entirety of lottery proceeds went into the state’s general fund, where it was used largely for other projects.
When the money did benefit education, it was used to fill gaps where the state budget failed to meet promised funding. Lottery profits were not given as extra revenue for public schools.
“In 1997, Virginia Lottery officials publicly apologized for implying that lottery funds were added ‘on top of’ the legislature’s annual appropriations for education,” according to the commission’s write-up.
Three years later, the Lottery Proceeds Fund became part of the Virginia Constitution, requiring all lottery profits to be used exclusively to benefit public education.
The process
All lottery profits are now given to public schools in Virginia, according to the Virginia Lottery website.
Here is the process by which fiscal year 2018’s $600 million was divvied up between the state’s 133 school divisions.
First, Virginia Lottery profits from each fiscal year are reported to the Virginia Department of Education, which analyzes pre-existing educational programs for a range of categories, such as special education, school supplies and affordable student breakfast, said Eileen Cox, Williamsburg-James City County Schools spokeswoman.
The education department then draws up a suggested financial plan based on its findings and the General Assembly votes on it.
Although the department plays a large part in the process, the General Assembly makes the final call on the amount school districts receive and what they can use it for, Cox said.
Flexible funding
Today, while some funding is required to go to specific programs, a significant portion of lottery profits are allocated to schools as additional revenue, called “supplemental per pupil allocation.”
The supplemental per pupil allocation funds are not allocated toward a specific program and are used all over the budget, said Kathrine Goff, York County Schools spokeswoman.
Regarding supplemental per pupil allocation, the education department said, “School divisions are permitted to spend such funds on both recurring and nonrecurring expenses in a manner that best supports the needs of the school divisions.”
The use of supplemental per pupil allocation is left largely up to the discretion of the district. These funds make all the difference because they are extra revenue, not just filling a hole left by the state budget neglecting to fill a predetermined need.
The final count
In fiscal year 2018, Newport News Public Schools received exactly $21,810,738 from lottery profits, Price said. A $5,636,794 minimum match was required from the school district to receive these funds.
Of that amount,$5,241,797 was designated as supplemental per pupil allocation, Price said.
Hampton City Schools were allocated $14,700,155 in fiscal year 2018, Goral said. The local minimum match was $3,341,417.
Goral said $3,768,989 of the total was designated as supplemental per pupil allocation.
Lotteries have been used to help fund public projects since as early as 1612, funding projects such as the construction of Harvard University and Yale University, according to the National Gambling Impact Study Commission.
