Committee Seeks More Lottery Money

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Committee Seeks More Lottery Money

Special Report - April 4, 2008
A legislative study committee voted on Wednesday to recommend giving an extra $32.5 million from the lottery reserve fund to 57 North Carolina counties for public school construction. Under the funding formula adopted when the General Assembly approved the lottery in 2005, these 57 counties are excluded from receiving 35% of the lottery proceeds set aside for school construction. The funding would only be effective for one year, while the committee conducts a long-term study of all major North Carolina public school funding formulas, including the Education Lottery public school construction formula.

The Lottery Act allocates 40 percent of the net proceeds from the lottery for public school construction. Roughly 65 percent of this total is distributed among all 100 counties based on total school enrollment. The remaining 35 percent is distributed among the counties in the state with average effective county property tax rates above the state average. The 57 counties in which property taxes fall below the state average are therefore excluded from receiving any of the 35 percent of the school construction funds. The geographic location of these counties is primarily in the western part of the State, along the eastern seaboard, and scattered in the Piedmont (Wake, Moore, and Davidson Counties, for example). Many legislators from these counties have been unhappy with the funding formula since passage of the lottery.

During Wednesday’s meeting of the Joint Legislative Committee on Public School Funding Formulas, legislators from the western part of the State attempted to make at least four different motions, each of which would have equalized the formula for funding public school construction for all counties. Committee chairman Rep. Rick Glazier (D-Cumberland) would not entertain a motion that would reduce the amount of public school construction funds that counties with higher property taxes presently receive or that would make the change in the school construction formula permanent. He did, however, allow a motion that would allow the excluded counties to receive school construction funding from the lottery reserve fund, as long as the change is temporary for one year while the long-term study proceeds. The $50 million lottery reserve fund was established as a fallback in case the lottery’s proceeds fall short of its target in the State budget. The joint study committee adopted other minor changes in the school funding formulas, but it saved any major changes for the long-term study’s recommendations.