Holiday scratch-offs win bupkis for Illinois students

Anyone betting those lottery tickets they gifted will help education would lose.

In Illinois, gifting holiday scratch-off tickets should come with the feel-good side benefit of helping public school students, except Illinois’ pension crisis guarantees lottery money never makes it to classrooms. 

When lawmakers were debating the Illinois Lottery in 1973, some of the public opposition was overcome by lawmakers promising “the state share [of lottery revenues] would be used entirely for public schools,” according to The Associated Press at the time. That promise was soon broken when the lottery started in 1974 and profits were deposited into the state’s general revenue fund, which pays for far more than just schools. 

But in 1985, former Gov. Jim Thompson signed legislation ensuring all lottery proceeds were deposited directly into the Common School Fund, the portion of the state budget that funds education. As a result, lawmakers today can claim most lottery revenues are technically “funding education.” The lottery itself pushes that narrative, with a caveat: “Twenty-five cents of every dollar spent on the lottery goes to fund public education, infrastructure projects, and other special causes.” 

A closer look shows that is a disingenuous claim. 

As far back as 1991, the Southern Illinoisan reported that saying lottery proceeds all go to the Common School Fund is “both accurate and meaningless.” More recently, WBEZ referred to the use of lottery proceeds by the state as a “shell game.”

The main reason is lottery profits do not typically represent a net increase in state spending on education. Instead, lottery money simply frees up revenue that would have gone to education and allows lawmakers to spend it on other things. 

Lottery money never really makes it to the classroom. Instead, those revenues are more than eaten up by annual contributions to education pensions. 

Pension contributions to the Teachers’ Retirement System (TRS) are paid from the Common School Fund. The state’s payment to TRS this year is just under $5 billion. 

The lottery was only projected to generate $700 million in 2020, with $728 million in 2021. And again, that money is divided among schools, infrastructure and “other special causes.”

 This school year, 36% of spending on education is going toward pensions. Spending on teacher pensions has risen 200% while spending on students in classrooms has risen just 20% since 2000. 

Lawmakers sealed the deal on this broken promise in 2009 when they capped the amount of lottery money that would be deposited into the Common School Fund. All proceeds above 2009 funding levels are now diverted to capital projects. 

Rising pension costs draw lottery and other funding away from classrooms as well as drive up property taxes, but there is a solution. Lawmakers can agree to amend the Illinois Constitution to protect earned pension benefits while allowing for changes to future, unearned benefits. 

Pension spending since 2000 has grown 501% as core services have been cut by the state. Illinois’ state and local governments already spend the most in the nation on pensions as a percentage of their revenues, yet Moody’s estimated the debt soared to a historic high of $261 billion in fiscal year 2020.

It is not a matter of Illinois taxpayers failing to pay enough toward pensions. It is a matter of where state leaders place their priorities, and priorities are defined by where they spend money. 

In the upcoming fiscal year 2022, almost 30% of the Illinois budget – $11.6 billion – will go solely to pensions.

Even so, more cuts are being threatened as well as an income tax hike as high as 20%. Pritzker tried to blame Illinoisans for the escalating budget crisis because they failed to pass his “fair tax” amendment on Nov. 3, but Illinois politicians have a history of broken promises to taxpayers. Illinoisans remembered those at the polls.

Instead of blaming taxpayers or pushing more tax increases, Pritzker should support a constitutional amendment which lessens Illinois future pension burden. House Joint Resolution Constitutional Amendment 38 is designed to do that.  

If passed, HJRCA 38 would allow for reforms such as Illinois Policy Institute’s “hold harmless” pension reform plan which would save the state roughly $2.4 billion the first year. It would save over $50 billion through 2045 while completely eliminating the state pension debt.

So, what are the odds Pritzker’s new budget proposal will guarantee money makes it to students and not pensions without real reform? About the same as winning the lottery.