Microsoft Word - Lotbook 2003-04.doc

History and Policy of the Florida Lottery and Education Funding...............................................1

Appropriations from the Educational Enhancement (Lottery) Trust Fund

2003-04 .............................................................................................................................7

1999-00, 2000-01, 2001-02, 2002-03 ...............................................................................8

1995-96, 1996-97, 1997-98, 1998-99 ...............................................................................9

1991-92, 1992-93, 1993-94, 1994-95 .............................................................................10

1989-90, 1990-91............................................................................................................11

1987-88, 1988-89............................................................................................................13

2003-2004 Programs and Projects Funded from the Educational

Enhancement (Lottery) Trust Fund.............................................................................................14

Educational Enhancement (Lottery) Trust Fund and Total Operating

Funds for Education....................................................................................................................24

2003-2004 School District Allocations from the Educational

Enhancement (Lottery) Trust Fund

District Discretionary Lottery Funds ..............................................................................25

School Recognition Program ..........................................................................................25

Bright Futures Scholarship Program...........................................................................................26

Classrooms First School Construction Bonds.............................................................................27

Classrooms for Kids Program.....................................................................................................28

A Historical Analysis of the General Revenue Fund Total Appropriations ...............................29

Financial Outlook Statement.......................................................................................................30

This document may be found online at:

http://www.firn.edu/doe/strategy/pdf/lottery.pdf

HISTORY AND POLICY:

THE FLORIDA LOTTERY AND EDUCATION

On November 4, 1986, a constitutional amendment was passed in a statewide election creating

Article X, Section 15, of The Constitution of the State of Florida. Of the 3,208,295 voters who

voted on the amendment, 2,039,437, or 63.57 percent, voted for the amendment while 1,168,858,

or 36.43 percent, voted against it. Article X, Section 15, reads as follows:

SECTION 15. State operated lotteries.--

(a) Lotteries may be operated by the state.

(b) If any subsection or subsections of the amendment to the Florida Constitution are held

unconstitutional for containing more than one subject, this amendment shall be limited

to subsection (a) above.

(1) Schedule--On the effective date of this amendment, the lotteries shall be known as

the Florida Education Lotteries. Net proceeds derived from the lotteries shall be

deposited to a state trust fund to be designated the State Education Lotteries Trust

Fund, to be appropriated by the Legislature. The schedule may be amended by

The 1987 Legislature enacted The Florida Public Education Lottery Act (Chapter 87-65, Laws of

Florida) which implemented the Constitutional Amendment. Section 24.102(2), F.S., represents

the expression of intent by the Florida Legislature for the lottery.

24.102 Purpose and intent.--

(1) The purpose of this act is to implement s. 15, Art. X of the State Constitution in a

manner that enables the people of the state to benefit from significant additional

monies for education and also enables the people of the state to play the best lottery

(2) The intent of the Legislature is:

(a) That the net proceeds of lottery games conducted pursuant to this act be used to

support improvements in public education and that such proceeds not be used as a

substitute for existing resources for public education.

(b) That the lottery games be operated by a department of state government that

functions as much as possible in the manner of an entrepreneurial business

enterprise. The Legislature recognizes that the operation of a lottery is a unique

activity for state government and that structures and procedures appropriate to the

performance of other governmental functions are not necessarily appropriate to the

operation of a state lottery.

be operated by a self-supporting, revenue-producing

(d) That the department be accountable to the Legislature and the people of the state

through a system of audits and reports and through compliance with financial

disclosure, open meetings, and public records laws.

History.--s. 2, ch. 87-65; s. 5, ch. 91-45.

The Florida Public Education Lottery Act also created Section 24.121, F.S., which governs the

allocation of revenues and expenditures of lottery funds. As amended by Chapter Law noted in

the history, Section 24.121, F.S., now reads as follows:

24.121 Allocation of revenues and expenditure of funds for public education.

As nearly as practical, at least 50 percent of the gross revenue from the sale of on-line

lottery tickets and variable percentages, as determined by the department, of the gross

revenue from the sale of instant lottery tickets shall be returned to the public in the form of

prizes paid by the department or retailers as authorized by this act. The variable

percentages of gross revenue from the sale of instant tickets returned to the public in the

form of prizes shall be established by the department in a manner designed to maximize

the amount of funds deposited under subsection (2).

Each fiscal year, at least 39 percent of the gross revenue from the sale of on-line lottery

tickets, variable percentages of the gross revenue from the sale of instant lottery tickets as

determined by the department consistent with subsection (1), and other earned revenue,

excluding application processing fees, shall be deposited in the Educational Enhancement

Trust Fund, which is hereby created in the State Treasury to be administered by the

Department of Education. The Department of the Lottery shall transfer moneys to the

Educational Enhancement Trust Fund at least once each quarter. Funds in the Educational

Enhancement Trust Fund shall be used to the benefit of public education in accordance

with the provisions of this act. Notwithstanding any other provision of law, lottery

revenues transferred to the Educational Enhancement Trust Fund shall be reserved as

needed and used to meet the requirements of the documents authorizing the bonds issued

by the state pursuant to s. 1013.68, s. 1013.70, or s. 1013.737 or distributed to school

districts for the Classrooms First Program as provided in s. 1013.68. Such lottery revenues

are hereby pledged to the payment of debt service on bonds issued by the state pursuant to

s. 1013.68, s. 1013.70, or s. 1013.737. Debt service payable on bonds issued by the state

pursuant to s. 1013.68, s. 1013.70, or s. 1013.737 shall be payable from, and is secured by

a first lien on, the first lottery revenues transferred to the Educational Enhancement Trust

Fund in each fiscal year. Amounts distributable to school districts that request the issuance

of bonds pursuant to s. 1013.68(3) are hereby pledged to such bonds pursuant to s. 11(d),

Art. VII of the State Constitution.

The funds remaining in the Administrative Trust Fund after transfers to the Educational

Enhancement Trust Fund shall be used for the payment of administrative expenses of the

department. These expenses shall include all costs incurred in the operation and

administration of the lottery and all costs resulting from any contracts entered into for the

purchase or lease of goods or services required by the lottery, including, but not limited to:

The compensation paid to retailers;

The costs of supplies, materials, tickets, independent audit services, independent

studies, data transmission, advertising, promotion, incentives, public relations,

communications, security, bonding for retailers, printing, distribution of tickets,

and reimbursing other governmental entities for services provided to the lottery;

The costs of any other goods and services necessary for effectuating the purposes

The unencumbered balance which remains in the Administrative Trust Fund at the end of

each fiscal year shall be transferred to the Educational Enhancement Trust Fund.

(a) Public educational programs and purposes funded by the Educational

Enhancement Trust Fund may include, but are not limited to, endowment,

scholarship, matching funds, direct grants, research and economic development

related to education, salary enhancement, contracts with independent institutions to

conduct programs consistent with the state master plan for postsecondary

education, or any other educational program or purpose deemed desirable by the

Except as provided in paragraphs (c), (d), and (e), the Legislature shall equitably

apportion moneys in the trust fund among public schools, community colleges, and

A portion of such net revenues, as determined annually by the Legislature, shall be

distributed to each school district and shall be made available to each public school

in the district for enhancing school performance through development and

implementation of a school improvement plan pursuant to s. 1001.42(16). A

portion of these moneys, as determined annually in the General Appropriations

Act, must be allocated to each school in an equal amount for each student enrolled.

These moneys may be expended only on programs or projects selected by the

school advisory council or by a parent advisory committee created pursuant to this

paragraph. If a school does not have a school advisory council, the district advisory

council must appoint a parent advisory committee composed of parents of students

enrolled in that school, which committee is representative of the ethnic, racial, and

economic community served by the school, to advise the school's principal on the

programs or projects to be funded. A principal may not override the

recommendations of the school advisory council or the parent advisory committee.

These moneys may not be used for capital improvements, nor may they be used for

any project or program that has a duration of more than 1 year; however, a school

advisory council or parent advisory committee may independently determine that a

program or project formerly funded under this paragraph should receive funds in a

No funds shall be released for any purpose from the Educational Enhancement

Trust Fund to any school district in which one or more schools do not have an

approved school improvement plan pursuant to s. 1001.42(16) or do not comply

with school advisory council membership composition requirements pursuant to s.

1001.452(1). The Commissioner of Education shall withhold disbursements from

the trust fund to any school district that fails to adopt the performance-based salary

schedule required by s. 1012.22(1).

All components of the Florida Bright Futures Scholarship Program shall be funded

annually from the Educational Enhancement Trust Fund. Funds shall be allocated

to this program prior to application of the formula for equitable distribution to

public schools, community colleges, and state universities. If shortages require

reductions in estimated distributions from the Educational Enhancement Trust

Fund, funds for the Florida Bright Futures Scholarship Program shall be reduced

only after reductions in all other distributions are made.

Each school district shall, on a quarterly basis, make available to the public and

distribute, in an easy to understand format, the expenditures of lottery funds

allocated to the school district.

--s. 21, ch. 87-65; s. 6, ch. 89-208; s. 14, ch. 91-79; s. 2, ch. 91-278; s. 6, ch. 91-283; s. 1,

ch. 96-341; s. 10, ch. 97-77; s. 43, ch. 97-190; s. 1, ch. 97-279; s. 12, ch. 97-384; s. 1, ch. 98-271;

s. 20, ch. 98-281; s. 26, ch. 99-398; s. 1, ch. 2002-227; s. 883, ch. 2002-387; s. 4, ch. 2003-1; s. 7,

ch. 2003-391; s. 1, ch. 2003-406.

Section 24.121, F.S., as amended by Section 1, Chapter 2003-406, Section 14, Chapter 91-79,

Section 2, Chapter 91-278, and Section 1,

Chapter 2003-406, Laws of Florida, provide

that at least 50 percent of the monies paid for

lottery tickets be returned to the public in the

form of prizes and that at least 39 percent of

the moneys be deposited in the Educational

Enhancement Trust Fund, which was created

by the Florida Public Education Lottery Act.

The remaining monies are to be used to pay

the expenses of running the lottery. Chapter

89-208, Laws of Florida, requires that at the

end of each fiscal year unencumbered funds

in the Lottery Department’s operating budget

be transferred to the Educational

Enhancement Trust Fund.

Education's share of the lottery proceeds is deposited into the Educational Enhancement Trust

Fund. Each year the Legislature determines which programs will be funded from education’s

Lottery Revenue D str but on Percentages

share of the lottery proceeds and the amount of such funding. The 1991 Legislature began a

policy of providing lump-sum funding to the school districts, community colleges, and Division

of Colleges and Universities. The school districts, community colleges, and Division of Colleges

and Universities were assigned responsibility for defining how they planned to use the funds for

educational enhancement.

With Chapter 97-77, Laws of Florida, the

1997 Legislature established the Florida

Bright Futures Scholarship Program, with the

intention that all components of the program

be funded from the Educational Enhancement

Trust Fund. Bright Futures Appropriations

are funded first, then the remainder of the

funds available is distributed equitably to the

educational delivery systems, approximately

70 percent to school districts, 15 percent to

community colleges, and 15 percent to the

Division of Colleges and Universities. In the

1997 Special Session “A,” the Legislature

passed Chapter 97-384, Laws of Florida,

which began a new policy of using $180

million of the school district’s share of the lottery proceeds to fund school construction needs of

public schools. Bonding of the $180 million was authorized which has provided $2 billion for

public school facilities. With Chapter 98-47, Laws of Florida, the 1998 Legislature limited the

final maturity of these bonds to 20 years.

Lottery D stribut ons to Educat on

Does Not Inc ude Student F nanc