The Lottery's Impact on Education

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State legislators are trying to figure out how to overcome a $500 million shortfall, without cutting the money to education further. More than a decade ago, the Kentucky Lottery was formed as a way to raise money for education. Now one of the most talked about topics these days, includes the allocation of lottery funds.

In 2001-02 the Kentucky Lottery brought in $638.7 million. Here's a breakdown:

Gross $638.7M

  • 60.2% - To Pay Winners
  • 27% - To State
  • 6.5% - To Marketing/Operating Costs
  • 6.3% - To Retailers/Commissions

    The 27% going to the state, produced $173 millions. More than $94 million went to fund college scholarship. Last year, nearly $53 million was marked for need-based scholarships (CAP/KTG), while $41.5 million was set aside for merit-based scholarships (KEES). Last year, nearly 6,000 students attending Western Kentucky University received lottery money.

    In addition to the scholarships, $3.7 million went into an Affordable Housing Trust Fund, while $3 million went to fund literacy programs. This money includes an Early Reading Incentive Fund, which gives grants to elementary schools. The rest, $71.4 million went into the state's general fund. Once in the general fund, there's no way to track how the money is specifically used.

    By 2005-06, the state's general fund won't be seeing a dime of lottery profits. A relatively new law dictates by 2005-06, all lottery revenue will be earmarked into the above mentioned categories.