OKLAHOMA CITY (April 26, 2017) - A bill sending education a significant increase of $110 million in Oklahoma Lottery funding over the next five years is headed to the governor after passing the Senate on April 25.
House Bill 1837, by House Appropriations Chairwoman Leslie Osborn and Senate Appropriations Chairwoman Kim David, sends more lottery revenue to education by letting the lottery offer larger payouts that improve lottery sales and ultimately send more money to public schools.
The more flexible lottery model, which has been successful in several other states, has been sought by lottery officials for a decade.
“This is a proven method to make the lottery work better and provide more support for our schools at a time it is truly needed,” said David, R-Porter.
Annual Oklahoma Lottery revenue to education peaked at $71.6 million in Fiscal Year 2008, but has declined since. Without HB 1837, the Oklahoma Lottery projects more declines that will cause education to lose a combined $25 million in lottery funding over the next five years.
To prevent those declines, HB 1837 makes the lottery more profitable and increases common education’s lottery funding through three steps:
1. Guarantee at least $50 million in lottery revenue for education every year.
2. Send profits above $50 million to specific K-12 public school initiatives.
3. Improve sales and lottery revenue to education by ending the counterproductive mandate that 35 percent of profits go to education.
Reading and science, technology, engineering and math (STEM) initiatives in K-12 public schools would receive a projected $85 million over the next five years under HB 1837.
“Businesses and educators agree reading and STEM programs are excellent investments because they help students begin developing the skills needed in the modern economy,” said Osborn, R-Mustang. “I’m proud the Legislature saw the wisdom in this opportunity to make smart investments in education without new taxes or new government programs in a tough budget year. We believe this change will pay excellent dividends down the road by making a program Oklahoma already has work better for our schools.”
HB 1837’s $110 million boost to education comes from preventing the $25 million decline that is expected without the bill and sending the projected $85 million to reading and STEM programs.
The Oklahoma Lottery has sent more than $750 million to education since it began in 2005, but its performance has been declining – particularly in comparison to other state lotteries – because of an ineffective profit requirement that would be replaced under HB 1837.
Many states don’t place percentage requirements on lottery revenues like Oklahoma does, which allows those lotteries to perform better and ultimately produce more funding for the governmental functions they support.
In 2007, North Carolina removed the profit requirement for its lottery and saw lottery funding to education rise by $318.7 million, or 101 percent, over the next nine years.
The Arkansas Lottery has no profit requirement and its per capita sales were $138 in 2015, compared to $44 in Oklahoma. Pennsylvania, Texas and California have also removed lottery profit requirements and grown sales, allowing those lotteries to send more money to the governmental functions they support.