Tennessee Lottery Revenue Spurs Education Funding Increase

(Photo: Pixabay, Creative Commons)

(Photo: Pixabay, Creative Commons)

Tennessee education received a huge boost to its financial foundation when an announcement was made this week concerning Powerball tickets sold in the state.

During the last year, over $1.6 billion in Powerball sales were made, which increased the lottery’s contribution to education programs to $394 million, which is 13% more than the 2015 payout.

The lottery money goes to the Tennessee Education Lottery Scholarship programs, including the HOPE Scholarship. Any extra funding goes to help the Tennessee Promise scholarship reserves.

The Tennessean’s Adam Tamburin reports that this year’s money will go into Tennessee Promise reserves and will be an extra cushion for the future in case there is a decrease in sales or higher education funding.

“Additional funding resulting from lottery sales strengthens the future of Tennessee Promise and (other scholarship) programs so that we can ensure that new generations of Tennessee students will also be able to more easily and affordably access post-secondary education,” Kate Derrick, spokeswoman for the Tennessee Higher Education Commission said in an email.

Rebecca Hargrove, president and CEO of the Tennessee lottery, said the added funding is much-appreciated news for young people and their families in the state who continue to profit from the over one million grants, scholarships, and dual enrollment awards the lottery has made available.

WBIR-TV says players and retailers have also benefitted. Since it was introduced, the lottery has allowed players to win over $10.1 billion in prizes. 189 winning tickets have been sold worth $1 million or above. During this fiscal year, there were two Powerball jackpot winners of $528.8 million and $144.1 million. Retailers who have partnered with the lottery have earned approximately $979 million in commissions since the lottery began.

One lottery player, Wayne Pruett, likes to play the $5 “jumbo scratch off.” Pruett says he would like to see younger kids benefit from the profits before they are of college age.

“It seems like maybe they could build a new school with some of these lottery proceeds or refurbish a couple of the schools they’re closing,” he said.

Some lottery players say that sales of tickets soared this year because of the unusually high jackpots. In January, writes Victoria Taylor of WBBJ-TV, a couple from Munford won over $500,000,000.

Retailers get 6% in total sales when they make tickets available and pay $15 weekly as a fee to carry the games in their stores.

But David Goldman, reporting for CNN, says lottery money sometimes ends up replacing existing funding rather than supplementing it.

Patrick Pierce, a political science professor at St. Mary’s College in Indiana, explains:

“Money from the lottery generally substitutes money that would go to education anyway, After a few years, lottery money earmarked for education tends to find its way into a state’s general revenue pool.”

North Carolina, for example, started having a lottery in 2005. It was called the North Carolina Education Lottery, and 100% of the proceeds were to be used for the North Carolina public education budget.

But by 2009, the state had cut its education funding, and now the state gives a smaller amount of its budget to education than it did when the lottery began.

The latest statistics from the North American Association of State and Provincial Lotteries reports that only 15 states use all or almost all of the proceeds from the lottery for education. For the majority of the states that have lotteries, it is hard to say exactly where lottery spending is going.