School districts are rooting for the Lottery Modernization Act,
even if they don’t know exactly what it means.
Gilroy
School districts are rooting for the Lottery Modernization Act, even if they don’t know exactly what it means.
But they do know one thing: it’s supposed to maintain funding levels for schools currently receiving state lottery funds.
“From our perspective, it’s critical that all three pass,” Gilroy Unified School District Superintendent Deborah Flores said of the first three propositions on the May 19 ballot. About $1 million of the district’s $85 million general fund came from the state lottery this year – “Not a huge amount but something we use and need and depend on,” Flores said. Without those funds, the district might have to cut programs or institute a hiring freeze, she said.
The measure would allow the state to borrow $5 billion from future lottery profits to close the its yawning $42 billion state budget gap. Lottery profits will actually no longer be paid to public education starting next fiscal year. Instead, the proposition authorizes increased payments from the state’s general fund to make up for the loss of the lottery contribution.
The proposition’s proponents claim increased payouts to lottery winners will attract more spending on lottery tickets and boost profits, allowing the state to avoid spending cuts and tax increases. If the lottery does well, school districts could receive even more money in future years.
But opponents said the measure will create more problems than it solves and depends on gambling revenue in a dismal economic climate to fund public programs. Lottery profits probably won’t be enough to cover increased payments to school districts from the state’s general fund in the coming years after they’re used to pay off the debt the state will accrue by borrowing against the lottery, according to the state’s legislative analyst.
“In the years after the $5 billion borrowing, the legislature would probably have to identify hundreds of millions of dollars per year in revenue increases or spending decreases to cover these costs,” according to the analyst.
