NC lottery hits record high. How much is actually going to schools?

The North Carolina Education Lottery dates back to 2005, when it was first narrowly approved by state lawmakers.
Published: Oct. 16, 2023 at 11:11 AM EDT
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STATESVILLE, N.C. -- At the Oakwood Middle School in Statesville, students have a new media center. Parents coming to the school for games enter through a freshly renovated lobby, filled with natural light. Children have areas outside to play and eat; students in wheelchairs now have a chairlift to get from floor to floor instead of leaving the building to roll down a long switch-backed sidewalk, rain or shine.

The renovations were finished last year as part of a $9 million capital project to give the building a facelift and reopen it as a magnet school in the Iredell-Statesville School District; about $5 million of that money came from lottery education funds.

The school is an example of how the North Carolina Education Fund often works: in this case, lottery dollars help fund a new capital project—but not in its entirety.

“The impression is that that lottery funded the entire project and just like with this one, it was a way for us to supplement that project, but not necessarily for us to cover the whole project,” said Tim Ivey, Chief Technology and Facilities Officer for the district.

How North Carolina’s lottery funds its schools

The North Carolina Education Lottery dates back to 2005, when it was first narrowly approved by state lawmakers.

Proceeds have climbed steadily ever since: in 2007, the lottery brought in $886 million, according to WFAE. Just days ago, lottery officials announced they had raised more than $1 billion for education in a single year for the first time ever after a record $4.3 billion in ticket sales.

Put simplest, given those numbers: For every dollar spent on a lottery ticket in North Carolina, about a quarter is going to a school.

Lawmakers control how those education funds are distributed each year, and they’ve changed the goalposts and programs funded over time.

For instance, the law passed in 2005 stipulated 35% of lottery revenue had to be diverted to education; later, they reduced that and instead increased how much could go to prizes.

Originally, the lottery also funded some teacher salaries. Today, one “pot” of lottery education funds instead goes to fund the salaries of noninstructional staff like janitors, bus drivers, and more.

Today, North Carolina law directs that most of the education money raised by the lottery goes into funding new construction, non-teacher staff salaries, prekindergarten programs, and scholarships.

Rural, urban divide in how lottery funds are distributed

The state legislature didn’t increase their distributions for most lottery-funded education programs from the 2021-2023 budget to the most recent one they passed for 2023-2025.

Capital project funding at $100 million, prekindergarten programs at $78 million, and salaries for noninstructional support personnel at almost $386 million all remained the same from one year to the next in both budgets.

The legislature sent most of the increase in lottery funding to a program called the Needs-Based Public School Capital Fund: a grant program for shovel-ready projects that’s targeted at the state’s most rural districts. In 2021, the state legislature had allocated $145 million to that program; that funding was increased to $254 million for 2023.

“It’s kinda like you have two different worlds facing the school systems right now,” Republican state representative Jeffrey Elmore said, who has also spent much of his life as a teacher.

Elmore is talking about rural and urban school districts across North Carolina, where dwindling tax bases and declining enrollment in many rural counties leaves them without the funding available to the state’s largest districts to build, for example, a state-of-the-art new school building.

Allegheny County in his district, for instance, has a population of fewer than 11,000. They recently got a large needs-based grant to build a new high school.

“They would have never had the tax base, ever, to be able to stand $50M on a new school,” Elmore said.

In the 2022 fiscal year, only 28 out of North Carolina’s 100 counties received money through this grant program, according to a WBTV analysis of data from the North Carolina Education Lottery.

Nine of those 28 counties had populations of more than 50,000; five of those had populations of more than 100,000.

The two largest needs-based grants of about $40 million each went to Washington and Northampton counties, with small populations of about 11,000 and 21,000, respectively.

Still, when accounting for all the different “pots” of lottery fund programs in addition to the needs-based grants, Mecklenburg and Wake counties – the state’s two largest by population – have received the most money over the years, coming in at more than $750 million distributed to both counties for education since the fund began.