Alabama Lottery bill altered to put some proceeds in state education budget

in Lottery

Young Americans are showing less interest in buying lotto tickets than their parents. And that's prompting lottery officials to worry about the odds for future growth. According to Reuters, overall ticket sales rose 9 percent last year versus 2015. But the number of millennials - adults in their late teens to early 30s - who play is falling. That is creating consternation among leaders of the industry, which generates $80 billion in annual revenue--more than the U.S. sales of movie tickets, music and concerts combined. Melissa Mancilla is a 21-year-old hotel worker. She said outside a downtown Los Angeles convenience store, "I feel like everything's just too expensive nowadays to just kind of throw away your money on luck." Wochit

If the lottery bill gets to the floor of the Alabama House of Representatives, it will include funding for education. That could affect its chances in the Alabama Senate.

The House Economic Development and Tourism Committee on Thursday approved changes to an amendment establishing a lottery that would split funds from the lottery between the General Fund and the Education Trust Fund. Rep. Becky Nordgren, R-Gadsden, the chair of the committee, said the committee would vote on the bill next week. 

"There was obviously a desire within the House to put a portion of the funds toward the Education Trust Fund," said Rep. Steve Clouse, R-Ozark, who is handling the lottery bill in the House. "This is what this does."
Clouse's amendment would put 75% of lottery proceeds into the state's General Fund, which pays for most noneducation services in the state, like Medicaid, the Alabama Law Enforcement Agency, Mental Health and the state prisons. 25% of the funds would go to the Education Trust Fund, which provides most of the money for schools in the state. 

Relative to the budgets, the amounts of money will be small. The Legislative Services Agency estimates a state lottery would bring in about $167 million a year, which would work out to $125 million for the General Fund and $42 million for the Education Trust Fund. The General Fund for fiscal year 2020 is expected to be about $2.1 billion; the Education Trust Fund is expected to be about $7.1 billion. 
If a lottery were in place today, the revenue it generates would only amount to six-tenths of a percent of the education budget, and just 6% of General Fund revenues. 
But with the General Fund expected to struggle to meet expenses for Medicaid and the Childrens Health Insurance Program (CHIP) next year, Clouse, the chair of the House Ways and Means General Fund committee, said any money would be welcome. 
"I know it seems relatively small, but $100 to $125 million is big to the General Fund when we're trying to deal with issues like Medicaid and the prisons," he said. "It's one of those situations where it's new revenue, so it will certainly help us."
Clouse said he expected the vote to be close in the House. House Speaker Mac McCutcheon, R-Monrovia, said he liked Clouse's substitute but declined to say Thursday where he thought the votes lay.
"I hate to make predictions like that, but there’s been a favorable response from members in discussions," he said. 

The changes could alter the calculations for the bill in the Senate, where the measure sponsored by Sen. Greg Albritton, R-Atmore, got out with the bare minimum of votes needed late last month. Some senators made their votes contingent on a proposal in the bill to provide money to debt payment and General Fund reserves. The chamber rejected an attempt to distribute money from the lottery to the Education Trust Fund, though adding education to the mix could win the votes of other senators who voted against it. 
Albritton said distribution would be the key issue.

"It’s not a matter of whether it’s good or bad as substitute," Albritton said after the committee met. 'It’s a matter of where the votes are."

The bill has drawn criticism from legislators who represent areas with dog tracks. They argue the paper-based lottery could prevent them from getting gaming machines that would be available to the federally-recognized Poarch Band of Creek Indians if the tribe — which operates casinos in Atmore, Montgomery, and Wetumpka — pursued a compact with the state of Alabama.

At least one gambling expert says those risks already exist for the state dog tracks, whether or not the lottery passes. The Poarch Band supports the current lottery bill but argues the lottery would not give them an advantage. At the same time, Poarch Band representatives have spoken against measures intended to extend legal protections to electronic bingo at VictoryLand in Macon County. Alabama Supreme Court decisions have eroded the legal basis that authorized the use of the machines. 

Albritton's bill required the support of Democratic Birmingham Sens. Linda Coleman-Madison and Rodger Smitherman to pass. Both got amendments approved aimed at protecting existing gambling in Jefferson County. Clouse's substitute keeps those changes.
As a revenue stream, a state lottery would be unlikely to provide long-term solutions to cash flow issues in Alabama. Lotteries tend to post flat growth over time and a state lottery would be unlikely to make a major impact on the state's bottom line or keep up with costs. 

https://www.montgomeryadvertiser.com/story/news/2019/05/09/lottery-bill-altered-put-some-proceeds-state-education-budget/1150540001/