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Wednesday, February 24, 2010

Education notebook: Lottery funds 8% of schools budget

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Many readers in recent weeks have phoned or e-mailed me as we all try to comprehend how schools in the Roanoke and New River valleys will trim millions of dollars from already tight budgets and wondering what impact it will have on area schoolchildren.

Two callers wanted to know why the public schools are hurting for cash when kindergarten through 12th-grade education is the beneficiary of the state's lottery proceeds.

The Virginia Lottery saw a decline in profits between the end of fiscal year 2008 and fiscal year 2009, likely another casualty of the economic recession. Profits fell by about $16 million between 2008 and 2009.

But the lottery funds only a portion of the state's vast budget of education -- about 8 percent. Charles Pyle, a Virginia Department of Education spokesman, said this fiscal year Virginia will send $5.3 billion in direct aid to the state's public school divisions and $430 million of that is from lottery profits.

The remainder of the state's education funding comes from state revenue streams, such as sales and income taxes. The state distributes funding using a complex formula called the local composite index, which measures each individual locality's ability to pay based on its property values and other wealth-based factors. The formula calculates how the state and the locality will share the cost of educating pupils.

Virginia's state-operated lottery began in 1989. That year the profits were appropriated to capital construction projects. Between 1990 and 1998, the lottery proceeds were transferred to the state's general fund.

For the past decade, profits from the lottery have been distributed to local school divisions and used solely for educational purposes. The provision has even been added to the state's constitution to make sure it happens.

Since 1999, the lottery has contributed more than $4 billion to Virginia's public K-12 schools.

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