Lottery - CalEdFacts

In November 1984, California voters passed Proposition 37, now known as Non-Prop 20, as a means to benefit public education. Since the California State Lottery began in 1985, the state has distributed 50 percent of lottery sales revenue back to the public in the form of prizes. Of the remaining revenues, public education, from kindergarten through graduate school, has received more than the statutorily required 34 percent minimum, with the state using less than the maximum 16 percent legally allowed to administer the games. In 2010, legislation was passed that modified the allocation formula for lottery in order to maximize the amount of funding allocated to public education. The legislation reduces the maximum percent to administer the games to 13 percent and allows the State Lottery Commission (SLC) to increase the percentage of lottery revenues for prizes to more than 50 percent and to establish the percentage to be allocated to public education. If the change in law does not provide more revenues for public education than the year prior to the law’s enactment, the prior revenue-allocation law will be restored.

The law authorizing the lottery requires school districts, including charter schools, to use lottery funds “exclusively for the education of pupils and students” and specifies that “no funds shall be spent for acquisition of real property, construction of facilities, financing of research, or any other non-instructional purpose.” In March 2000, voters passed Proposition 20, known as the “Cardenas Textbook Act of 2000.” Proposition 20 provides that, beginning in the 1998–99 fiscal year, one-half of statewide growth in lottery funds for education over the level set in the 1997–98 fiscal year must be allocated to school districts and community colleges for the purchase of instructional materials.

The lottery provides about one percent of total kindergarten through grade twelve (K–12) funding. As such, lottery sales revenue represents only a small part of the overall budget of California’s K–12 public education that alone cannot provide for major improvements in K–12 education. For 2017–18, lottery allocations to K–12 education totaled $215.80 per pupil in average daily attendance (ADA) of which $155.86 per ADA was for unrestricted lottery revenues and $59.94 per ADA was for Proposition 20 revenues. Based on the SLC’s revenue projections, the California Department of Education estimates state lottery allocations in 2018–19 will total $204 per ADA of which $151 per ADA will be unrestricted and $53 per ADA will be restricted pursuant to Proposition 20.

For further information on lottery funds, contact Janet Finley, Fiscal Consultant, Categorical Allocations and Management Assistance Office, by phone at 916-323-5091 or by e-mail at JFinley@cde.ca.gov. Additional information is also available under related links on the Lottery Web page.

K–12 Lottery Revenue Allocations
1985–86 Through 2017–18

*The per ADA rate increase is largely due to the change in the ADA used to calculate lottery. Beginning in 2015-16, Adult Education and Regional Occupational Centers and Programs ADA will no longer be included for purposes of calculating lottery funding (Government Code 8880.5(a)(2)).