DO LOTTERY REVENUES SUPPLEMENT STATE FUNDING FOR SPECIFIC PROGRAM AREAS SUCH AS EDUCATION OR SUPPLANT IT?
In promoting lotteries, proponents typically argue that lottery revenues will enhance funding in certain program areas such as education.However, there is no guarantee that state legislatures will not merely substitute lottery revenues for normal appropriations.The Center found that research results on this question are inconclusive. Research in California, Florida, and Michigan shows that lottery funds have merely substituted for normal levels of appropriations, despite the fact that lotteries had been promoted as boosting spending for education.And, a separate study by Money magazine found that states with lotteries devote a lower percentage of their total operating budgets to education than do states without a lottery.The Money magazine study also found that lotteries do not necessarily protect taxpayers from tax increases.It found that tax revenue grew by 21.7 percent over a five-year period in lottery states compared to 7.2 percent tax revenue growth in states without a lottery.Ho
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