School Construction Lottery Process Explained

Where does the North Carolina Education Lottery money go? You know, you buy a ticket, you put money into the education lottery, and you think all that money goes to North Carolina schools. But that is not quite how it works.

Of every dollar, 61% goes back into the lottery for prizes, 28% goes to education, 7% goes to retailer commissions & incentives, and 4% goes to administration expenses.

Of that 28 percent for schools, the Education Lottery website says 45.8% goes to teacher pay, 20.8% to school construction, 15.7% to preschool through kindergarten, and 15.3% to scholarships and aid, and 2.4% to digital learning.

When you see this it looks simple. In reality, it's anything but! The state legislature has permission to change the numbers every year. That 20.8% for school construction started out as 40%! And as WFMY News 2's Faith Abubey found last summer, that money isn't really used to pay for construction.

When the state approved the lottery in 2006, legislators said in a statute, 40% of the proceeds would go to counties for building and renovating schools.

"Most counties, the lottery money has been used for debt service for all the schools that we're having to build because of the class size which means bigger schools," said Zeb Hanner, assistant Davidson County manager.

The bills for the loans have been pouring in, but for the last three years, the 40% outlined in the statute has dropped to 23%.

"We took on debt in this county we would have never incurred intentionally," said Mark Richardson, county commissioner.

"You're not only impacting the local government you're impacting tax payers." said Hanner.

Former Senator Pete Brunstetter is co-chair of the senate appropriations committee. He says the 40% was only a guideline -- not a requirement.

"Counties were not told to necessarily rely on this to leverage for debt. But we are aware that a number of them have," "They were never assured they were going to get that percentage," said Brunstetter.

If you look on the lottery website you can find this chart. It explains how much money each county received. But again -- the school districts themselves don't decide or distribute where the school construction money from the lottery goes.

The money goes to county commissioners who typically use it to pay down bond debt on for schools.

To see the Department of Public Instruction's list of Projected completed and whether or not lottery money has been used, click here.


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