Huge jackpots fuel record lottery money to schools fund

Shawn D. Lewis
The Detroit News

Those scratch-off lottery tickets and huge Powerball jackpots are paying off in a record-breaking fashion for Michigan schools.

The Michigan Lottery contributed a record $888.9 million to the state School Aid Fund in the 2016 fiscal year. It marks a 12 percent increase from the previous record of $795.5 million set in 2015, according to preliminary results released Monday.

Double-digit growth in the lottery’s instant game portfolio, record player Powerball purchases from the $1.6 billion jackpot run in December and January and online games, launched in 2014, were credited by lottery officials with the record funding.

It was the 10th straight year the lottery has provided $700 million or more for public education in Michigan. For that 10-year span, the lottery’s contributions total $7.6 billion.

The lottery’s funding for public education equals more than $20.5 billion since 1972.

Jeff Holyfield, Michigan Lottery spokesman, said it’s up to the Legislature to determine how the money is allocated to the schools.

“We estimate what we provided last school year was about $580 per each child in K-12 in Michigan, regardless of the district,” Holyfield said. The money then goes into the School Aid Fund and the Legislature sets the funding levels.”

The per-pupil foundation allowance this school year is between $7,511 and $8,229.

Michigan Department of Education spokesman Martin Ackley explained how the money arrives for the schools.

“The net lottery revenues are deposited into the state School Aid Fund and distributed through the per pupil foundation allowance appropriated by the Legislature,” Ackley said. “The lottery funds are sent right to the School Aid Fund, and is not considered ‘extra money’ … just as if the state collected more sales tax or property tax revenues — that would not be considered ‘extra money’ either.”

Asked if this means the more the lottery provides, the less needs to be shifted from the general funds to schools, Ackley said: “That depends on the state Legislature, which appropriates what it deems to be needed for state public schools, but the percentage or amount of general fund dollars is not set in law — the Legislature has discretion on that amount.”

For each dollar spent on a ticket in 2016, about 29 cents went to the School Aid Fund, according to lottery officials.

According to the state budget office, in fiscal year 2015, the top three sources of revenue for the School Aid Fund were sales and use taxes (43.6 percent), personal income tax (18.2 percent) and property taxes (13.6 percent).

Other sources include federal revenue, 11.8 percent, miscellaneous taxes, 6.5 percent; the lottery, 5.8 percent; and the general fund, 0.2 percent.

“While lottery funds only account for around six percent of the entire state School Aid Fund each year, it certainly helps local school districts to have more resources to drive student achievement forward,” Ackley said.

Holyfield said the lottery benefits students and taxpayers.

“Every dollar we provide is a dollar that doesn’t have to come from the taxpayers,” he said. “We’re in the entertainment business and provide entertainment, value and excitement. From that, we’re able to provide a nice chunk of funding each year.”

The 2016 performance made the Michigan Lottery the fastest growing lottery in the nation.

The Michigan Lottery also set several other records in 2016:

■$3.1 billion in player purchases, eclipsing the previous mark of $2.8 billion in 2015.

■Instant game purchases hit $1.1 billion, after topping $1 billion for the first time last year.

■Players won $1.9 billion in prizes, up from $1.7 billion in 2015.

■$231.7 million was paid in commissions to retailers, breaking the previous mark of $203.6 million set last year.

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