School Law Bulletin #2005/10

In mid-August of 2005 the Senate and House of Repre- sentatives, working into the wee hours of the morning, reached agreement on the state budget—an event generally indicative of impending adjournment. When they did not adopt H 1023, the lottery bill passed by the House in April of 2005, many declared the lottery defeated once again. After the budget’s passage, a few lottery opponents even left Raleigh with no plans to return for the waning days of the session—like sports fans heading to the parking lot early, confident that the game is in the bag. But on August 30, 2005, in a dramatic ending few had predicted, the Senate voted 25 to 24, with Lieutenant Governor Beverly Perdue casting the deciding vote, in favor of the State Lottery Act, thus ending a losing streak for lottery proponents that had spanned more than two decades. Governor Michael Easley signed S.L. 2005-344 (H 1023) into law the next day.

Although the Lottery Act spells out the way net lottery proceeds are to be allocated among specified educational priorities and programs, it does not address the question of whether revenues from other sources traditionally used to fund such priorities and programs may be reduced or diverted in light of lottery funding. The lottery bill ratified by the General Assembly and signed by the governor, H 1023, pledged that net lottery revenues would not sup- plant existing or projected state revenues for the public pur- poses identified in the Lottery Act, but would supplement existing funds. Had this provision become law, lottery pro- ceeds would have resulted in a significant increase in state funding for the educational purposes designated in the act. However, the State Budget Act, ratified two weeks before the Lottery Act, provided that if the Lottery Act became law, language prohibiting net lottery revenues from supplanting existing revenues was to be deleted from new G.S. 18C-102. Thus, the Lottery Act, as amended, does not address the issue of whether state spending for the purposes set forth in the act—or for that matter, education in general—will increase as a result of the lottery.