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Tuesday, December 27, 2011

Just where is the Florida Lottery money going?

From Sunshine News

by Gray Rohrer

Florida lottery sales totaled $4 billion in the 2010-2011 fiscal year which ended June 30, an increase of 2.8 percent. The numbers reverse a two-year trend in declining sales due to the downturn in the economy.

The sliding sales figures had led to a decrease in the amount of money given to Florida’s Education Enhancement Trust Fund, to which the lottery was designed to contribute. Last year, lottery transfers to the fund totaled $1.122 billion, but are expected to increase for the 2011-2012 fiscal year along with increasing sales.

“Lottery sales continue to move because people want the opportunity of the fun and the entertainment. It’s really just that simple. They want the entertainment value the lottery offers regardless of the economic times. But people have to make choices with their discretionary dollars. It is a discretionary entertainment dollar,” Department of Lottery Secretary Cynthia O’Connell said Friday at a meeting of the Economic Club of Florida in Tallahassee.

She was appointed to head the Department of Lottery in February by Gov. Rick Scott.

“I can only take credit for half the year, but I’ll take credit for it,” O’Connell said.

O’Connell’s goals for the current fiscal year are to improve on the uptick in sales. She expects to hit $4.22 billion in sales and give $1.25 billion to the Education Enhancement fund.

Yet many taxpayers remain concerned about the amount of money flowing into education from the lottery. It was set up in the 1980s to do just that, but lawmakers have consistently siphoned funds from the education trust fund for general revenue, leading the lottery money to sustain rather than "education" funding.

In the late 1980s, voters approved a lottery for Florida primarily because those who sponsored the ballot initiative promised the proceeds would go to bolster education, not replace money the state held back.

It didn't happen. In fact, that broken promise was a bone that stuck in the craw of voters for 10 years -- until 1997 when Ken Pruitt, then in the House, and Don Sullivan in the Senate, crafted and sponsored the Bright Futures scholarship program.

Bright Futures was funded with 25 percent of the state's lottery proceeds, with an understanding that the scholarship program could grow to 50 percent without touching the lottery's payouts or administrative costs.

Over the years the lottery trust fund has been raided, legislators talk about Bright Futures as "too costly too sustain in its original form" and there is little public discussion of how much "enhancement" money now goes straight into education general revenue.

“We’re in the business of providing revenue to the Department of Education,” O’Connell said when asked about the lack of increase in education enhancement dollars.

The lottery gives money to the DOE, and can’t help what it does with the funds and how legislators appropriate for education, she explained. “We let them appropriate where it goes."

Lawmakers have been nearly unanimous in their support of the state lottery, but some have sought to curtail unsanctioned forms of gambling throughout the state. Most recently, this has come in the effort to shut down Internet cafes, where customers pay money for a card to play games of chance on a laptop.

The new businesses have popped up in strip malls throughout the state. O’Connell admitted they present a rival to the traditional lottery, but highlighted the differences between the two games.

“Well, certainly it's competition for the Florida lottery. We publish odds for our players, we’re a legal entity and we’re moving forward to show our players great benefits in terms of their play going to fund education,” O’Connell said, adding that a legislative study to determine the impact of Internet cafes on the lottery has been commissioned.

Reach Gray Rohrer at or at (850) 727-0859.

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