Thursday, January 28, 2010

Open Door Policy - Jan. 25, 2010 (lottery/casino education funding)

I hope everyone had a great weekend! I had the chance to see some great basketball during the county tournaments, along with watching Oklahoma State on TV get their best road win in 52 years against #9 Kansas State . The Grady County basketball tournament was exceptionally special since Jack Jerman was recognized for his retirement and I worked with Gov. Henry to get Saturday, Jan. 23 dedicated as “Dale Smith Day” for the state of Oklahoma , named after the deceased school superintendent from Friend. Dale was great to work with and he is greatly missed by all who had him as an educator.
Along the lines of education, I have been requesting information regarding school lottery funding in conjunction with legislation I have been reviewing from other legislators, and I thought you also might be interested in the data. The breakdown goes as follows:
The legislation creating the lottery was passed during my first term of office in 2003 and ratified by the people on the general election ballot of 2004. The bill which was passed specified that 45 percent of the lottery funds would go to prizes, while education programs receive 35 percent and administration of the lottery, including advertising, would get the remaining 20 percent.
With the 35 percent going to education, the breakdown with this since 2006 includes common education generally receiving 45 percent, the School Consolidation Assistance Fund receiving 5 percent and the Teachers Retirement Dedicated Revenue Fund receiving five percent, all considered common education programs for a total of 55 percent of the breakdown. Higher education has received 40.5 percent, career technology schools have garnered 4.43 percent and rehabilitative services received a one-time amount of $250,000, which totaled the remaining percentage.
Common education’s percentage can be used for a number of purposes under the law relating to education from Kindergarten through twelfth grade. As it was decided by the legislature, the Oklahoma Lottery would mainly be used for teachers’ salaries to bring them closer to the regional average and deter losing many educators to Texas and other states with higher salary averages. Due to this decision, it naturally followed that these monies run through the School Funding Formula, since that is how teachers’ salaries are funded by law for equity.
Another point is that lottery funds are allocated based upon estimation of the proceeds the state will receive through ticket sales. Two of the years had significant shortfalls in estimation, to the total of $59 million dollars. This was made up by monies from the General Revenue Fund during those years. The numbers have been accurate over the past two years, so no supplemental funds have been required to make up losses. The total net amount collected through the Oklahoma Lottery over the four year period so far has been $278,733,247.
Another question on gaming issues is why we do not see more from tribal casinos in Oklahoma ? This is largely in part to the tribes running the casinos being considered separate nations by federal law. The State of Oklahoma works with 39 separate tribes/nations located in Oklahoma and the state must negotiate changes through a compacting process. This is done by the governor and his staff and only happens over a period of years based upon when the compact will come up for re-negotiation. In order to receive a higher percentage of revenue, the state must negotiate to increase that amount with tribal leaders and often times, must submit something in exchange for agreement. The federal government has established this process by setting up the current system of how the United States recognizes the various Indian nations and their membership.
Current Oklahoma law states that tribes shall distribute 10 percent of the proceeds to the Oklahoma Tax Commission, minus $20,833. This amount is taken monthly for gambling addiction treatment programs administered through the Oklahoma Department of Mental Health and Substance Abuse. Of the remaining, 88 percent of this goes to the Education Reform Revolving Fund, which was created by House Bill 1017. This is distributed to the school districts through the State Department of Education. The remaining 12 percent goes into the General Revenue Fund. That 12 percent was originally dedicated to the Oklahoma Higher Learning Access Trust Fund for college tuition, but in Fiscal Year 2009, the money was diverted to the General Revenue Fund because OHLAP, now called Oklahoma ’s Promise, started receiving its funding off the top of the General Revenue Fund. So, in a sense, the second portion of the tribal casino collections still funds education through these scholarships. Oklahoma ’s Promise provides these scholarships for Oklahoma students who sign up in eighth grade and meet certain criteria during high school. If you are interested in this program, please contact the local school for more information.
In Fiscal Year 2009, the state received a total of $105.7 million from tribes due to casinos. Racinos, which are the horse tracks operated by tribal nations, fall under the same funding formula and they contributed an additional $14 million which went into education funding. These numbers were acquired from the Oklahoma Office of State Finance and information collected from the Oklahoma Lottery Commission by the Ok. House Staff.
It is an honor to represent your views at the State Capitol. If you wish to contact me and discuss one of these or another issue, I can be reached at my office in Oklahoma City toll-free at 1-800-522-8502, or directly at 1-405-557-7305. My e-mail address is at work. My mailing address is PO Box 559 , Rush Springs, OK 73082 and my website is on the Internet. Thank you for taking time to read this column and I look forward to seeing you soon.

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