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Lawmakers question lottery share for education

ATLANTA - Concerned lawmakers Monday peppered Georgia Lottery Corp. officials with questions about the declining percentage of lottery proceeds going to education in recent years.

But lottery President Margaret DeFrancisco said there's no reason to worry because the actual dollars going to the state's HOPE Scholarship and pre-kindergarten programs are continuing to rise.

"We are at the apex," DeFrancisco told members of the General Assembly's Joint Lottery Oversight Committee. "My goal is to keep that chugging along."

Of nearly $3.2 billion in sales during the last fiscal year, the lottery turned over $853.6 million to education.

While the amount of lottery money going to education has steadily increased during the past decade, the percentage of the take going to HOPE and pre-k has declined from 35 percent in fiscal year 1996 - the goal set in the law creating the lottery - to just 26.8 percent in fiscal year 2007.

"If this trend continues, it gives us cause for concern," said Sen. Chip Pearson, R-Dawsonville. "At some point, we could literally hit a pretty good wall out there."

But DeFrancisco said the same factors that have enabled the lottery to put more and more money into education each year are responsible for reducing the percentage of lottery sales available for the HOPE and pre-k programs.

She said the Georgia Lottery increasingly has come to be dominated by instant scratch-off games, which by their nature require setting more money aside for prizes.

"We're not ignoring the drawing games, but Georgians like to scratch," she said.

DeFrancisco said lowering the payouts in order to dedicate a higher percentage of lottery proceeds to education - as some other states have done - would be counterproductive because it would drive down sales.

"The more you pay the players, the more likely they are to play again," she said. "The less you pay to players, the less likely they are to play. Your sales go down and, in turn, your profits go down.

"If we went to 35 percent, our profits would plummet."

Several members of the oversight committee also complained that the lottery seems to be most popular in low-income neighborhoods, often predominantly African-American, where few high school students end up qualifying for HOPE scholarships.

"The heavier the sales, the smaller the number of HOPE scholars," said Sen. George Hooks, D-Americus, who represents half a dozen rural counties in Southwest Georgia with black populations of more than 60 percent.

But DeFrancisco said the lottery targets a broad spectrum of Georgians in its advertising campaigns.

"Mathematically, we couldn't get the dollars we get if only one portion of the population was playing," she said.

SideBar: At a glance

While the amount of money generated by the Georgia Lottery going to education is increasing steadily, the percentage of lottery proceeds going to the HOPE Scholarship and pre-kindergarten programs is declining:

FY/$ to Education/% to Education

2002/$726.2 million/31.2%

2003/$751.6 million/30.6%

2004/$782.7 million/30.6%

2005/$802.2 million/29.3%

2006/$822.4 million/27.7%

2007/$853.6 million/26.8%

Sources: Georgia Lottery Corp., Senate Budget Office