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Governor’s Plan To Use Lottery Money To Affect CMS Debt Payments

Posted: 6:25 pm EST March 5, 2009

A number of viewers have contacted Eyewitness News to ask why the North Carolina Education Lottery can't bail out school systems during budget crunches.

Eyewitness News reporter Tim Caputo has been digging through the numbers and now has an answer.

He found that 35 percent of all the money the lottery makes goes to education. First, the lottery pays off all the winners. After that, money is put into a reserve fund, in case sales are slow.

That reserve fund can only have a maximum of $50 million in it. After it's full, money funds education programs.

The money is split four ways: school construction, pre-K programs, teachers’ salaries and scholarships. The money specifically has to be used for these categories.

The money for teachers’ salaries is given to the state, which hands out proportionate amounts to each county based on student population.

The teacher money is included in the overall funding that the state provides to the school districts.

Overall, Charlotte-Mecklenburg Schools got more than $730 million from the state last year.

School construction dollars go directly to each county, not the school districts. That money can only be used for new school construction or to pay off old construction debt.

Mecklenburg County is $1.4 billion in construction debt. This year, Mecklenburg County was supposed to get about $14 million from the lottery to pay off debt, but that amount could be lower this year.

Governor Beverly Perdue recently took $88 million out of the lotto money to cover the state's massive debt this year. The first $50 million depleted the reserve fund. The other $38 million comes from the construction money.

For Mecklenburg County, that'll be a reduction of about $4 million.

The county still needs to pay off the debt, so they'll now have to find somewhere else to cut $4 million to continue their debt payments on time.

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