California Public School District Uses of State Lottery Revenues

The 1995–96 California state budget allocated an additional $1 billion to K–12 education over the previous budget year. While the funding increase was welcomed by educators across the state, the additional funds were not part of any effort to restructure school finance policy in the state. Rather, two-thirds of these additional funds were designed to be used to offset non-recurring expenses, of which the schools have many. Deferred maintenance, library materials, technology improvements, and facility upgrades were among the categories of spending to which schools could dedicate these new monies.

In this tenth anniversary of the California State Lottery, it is interesting to see how schools have incorporated lottery revenues, which also were designed to offset non-recurring expenses. As the authors point out, the explicit purpose of lottery funds for schools was to augment funds for instructional purposes and not replace other funding streams. But the research shows that over time, school sites have come to rely on the lottery funding source to meet the costs of their core instructional program. This reliance, however, has come at the same time that lottery revenues have decreased compared to earlier years.

This paper, therefore, has two purposes. First, it reviews the history of the California State Lottery as a funding source for schools. In that, the authors review the spending patterns and their changes over time. Second, the paper illustrates the way in which non-recurring costs are interpreted in a system that has fundamental shortfalls in core programs. Over time, we will be able to assess whether the fiscal supplements granted schools in 1995–96 were spent in the best long-term interests of public education in California.