KANSAS CITY, Mo. -- Lottery sales in Missouri are at an all-time high, but the profits going to education are not. This has prompted Governor Jay Nixon to look into where all the money is going.
Amendment 11, passed in 1992, directed all profits from lottery sales to go towards education. The amount taken in by the Missouri Lottery has continued to increase while profits have not. The idea of creating extra money for the schools has not turned out that way.
"The lottery has not been a windfall for Missouri schools, what it has been is a direct revenue stream for the state of Missouri to fund educational programs that have already been in existence,” Paul Harrell, Chief Financial Officer of the North Kansas City School District, said.
Harrell and other educators throughout the state are glad Gov. Nixon is looking into where the money earned by the sale of lottery tickets is going. FOX 4 caught up with the governor to ask him what sparked this investigation.
"I think from a business model when you look at that, and you see we have gone from a lottery that at one point had a $600 million income and was transferring about $280 million to education, now it is over $1.1 billion and still only transferring under $300 million, we want to look at that from a business standpoint,” Gov. Nixon explained.
Gov. Nixon says prize payouts have gone up to compete with other state lotteries, but he is most concerned with the money paid to outside contractors, reimbursements to lottery retailers; saying the structure of lottery funds could be top-heavy.
Lottery player Homer Everett has a different thought about it.
"I think it's going in somebody's pockets that don't really need the money. It needs to go where it does the most good,” he said.
Currently, slightly fewer than 25% of lottery proceeds go towards education. In the NKC School District, that translates to four percent of its budget, which is down this year, so far by four percent. Harrell says instead of a bonus revenue stream as it was intended, the state depends upon lottery revenues for its education budget. If the decline continues, it will be bad news for local schools.
"Obviously major cuts would have to happen at the state budget, which would filter down to the state budgets if we no longer had that source." Harrell said.
Over the years there have been budget cuts in education, so some people contend that the state relies on the lottery money to supplement those cuts, instead of the lottery being used for new programs.