Budget Break Down by Sen. Roger Thompson, Senate Appropriations Chair

I want to thank everyone for taking the time to look at our weekly Budget Break Down articles and for sharing your comments and questions.  One topic I’m frequently asked about is what happened to all of the lottery money? 

Just last month, the Oklahoma Lottery Commission announced that since 2005, the lottery has contributed more than $1 billion to education.  That’s a lot of money, but how does it all break down?

In 2004, the people of Oklahoma approved State Questions 705 and 706 creating the lottery.   Under the terms of these two measures, at least 30 percent of gross revenue during the first two years of the lottery and 35 percent of gross revenues thereafter would be dedicated as net proceeds to the Oklahoma Education Lottery Trust Fund for appropriations.  Beginning in 2019, the 35 percent requirement was removed in order to allow the Lottery Commission to improve sales, and therefore maintain distributions for education.

You must remember when we talk about money for education, we don’t just mean our public grade schools and high schools. We’re also talking about our public colleges, universities and our CareerTechs.  When you look at the net proceeds that come in, Common Education, which is pre-K through 12, gets 45 percent, and Higher Education gets 39.5 percent. CareerTech receives 5.5 percent.  The School Consolidation Fund and Teacher’s Retirement Fund each receive 5 percent as well. 

The Lottery Trust Fund is a certified fund, which means the Legislature can appropriate up to 95 percent of the estimated collections for the upcoming fiscal year.  If collections are more than the amount that was appropriated, the surplus is rolled over and is available to be appropriated in subsequent years.  If lottery revenues come in below the appropriated amount, agencies must either absorb the difference or the Legislature must identify additional funds.  

In Fiscal Year 2006, the first year of the distribution of lottery funds, Common Education was appropriated more than $28 million.  In FY 2020, it was over $28.4 million, and for the current budget year, FY 2021, it was about $32.7 million. This fiscal year’s appropriation for Higher Education was about $28.7 million, while CareerTech received over $4 million.  The Teacher’s Retirement Fund and School Consolidation Fund each received about $3.6 million.

As I said, those are the numbers when you look at the net lottery funds for education.  Breaking down the total lottery funds that come in, in FY 2019, which is the most recent year we have total numbers, we brought in just under $240 million.  Out of that total, $171.6 million, or a little over 71 percent, went for lottery prizes and other operating expenses. But in FY 2019, we still wound up with $71.8 million that went back to education as voted on by Oklahomans.

So where does the lottery money go?  Well, it may not be as much as some people had thought the lottery would produce, but I think most people would agree $1 billion is a significant investment in education, and it’s being used exactly how Oklahomans directed it to be spent.

If you have any questions about the budget or the appropriations process, I invite you to contact me at 405-521-5588 or email Roger.Thompson@oksenate.gov. Thank you.