The issue:
Ohio Lottery profits fall $31.3 million short of projections.
Our opinion:
Depending upon lottery projections can be risky gamble for state.
Some budget news this week should be filed away by state officials and referred to the next time the debate about casino gambling or videoslots comes up.
The numbers demonstrate the uncertainty that comes with using gambling as a source of revenue. The Associated Press reported this week that the Ohio Department of Education is taking $30 million from a reserve fund because the state lottery profits to which it's entitled failed to meet expectations for the past budget year.
Despite a slight increase in overall profits, the Ohio Lottery fell $31.3 million short of its profit projections for the fiscal year that ended Monday.
The Education Department will use the reserve fund transfer to make up for the difference. Lottery profits, by law, go to schools and make up about 9 percent of the Education Department's annual state funding. In the fiscal year that ended Monday, the lottery gave $641.4 million to schools, about 4.6 percent less than the goal of $672.7 million, but $6.2 million more than in the previous fiscal year.
Obviously, despite griping by taxpayers, the lottery makes a significant contribution to Ohio's schools.
But the uncertainty of gambling profits could have an impact on budget planning.
Mega Millions, the multistate game that lawmakers approved last year to balance the state budget, beat expectations by turning a $74 million profit in its first year. State officials had estimated it would raise $41 million a year.
Lottery officials attributed the overall profit increase in part to a 4.4 percent rise in sales -- from $2.1 billion to $1.9 billion -- compared with a year ago.
Total lottery projections were set several years ago when the economy was better, and the lottery agency alerted the Education Department months ago that the amount transferred to them would be lower than anticipated.
As a result, $30 million in one-time money was taken out of the lottery profit reserve fund, which now has a balance of about $8.4 million. The state will start rebuilding the fund later this month by transferring about $7 million in unclaimed prize money into it.
The shortfall is not in and of itself an indictment of the use of gambling profits to fund state programs and education. And we still think voters should have had the opportunity to address the videoslots issue at the ballot box.
But the numbers and the need to shuffle funds because of the inability to provide accurate projections certainly must be factors in the sure-to-come-again debate about video slots and new lottery games.
Gambling clearly is here to stay as part of the state's revenue.
Questions, however, should include the reliability of projections for planning purposes as the state determines just how much it wants to depend on games of chance to fund crucial programs.
Source: www.mansfieldnewsjournal.com
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