How $20M in lottery profits is funneled each year into New Hanover, Brunswick, Pender schools

Money raised through the N.C. Education Lottery is used to fund various repair projects in New Hanover County Schools, while Pender and Brunswick counties allocate the profit to outstanding debts. (Port City Daily/Alexandria Sands)

SOUTHEASTERN N.C. –– Controversially signed into law 15 years ago last week, the N.C. Education Lottery has funneled more than $8 billion into local school systems since its inception.

Each time a dollar is spent on a scratch-off ticket or Powerball entry in North Carolina, 25 cents is handed over to the state government to further distribute across 100 counties. Seventy cents is used toward prizes or sales commission for the retailer.

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Fiscal year 2020 was the biggest year for the lottery to date, with more than $700 million raised for education. Sales are on track to surpass that number in fiscal year 2021, according to lottery spokesperson Van Denton.

“We’ve increased sales every year,” Denton said. “It’s been interesting with the pandemic and Covid, in that our sales have remained strong and are growing.”

Denton credits a lack of consumer options to the consistency in sales through the pandemic. While Covid-19 shuttered movie theaters and venues, convenience stores and grocers where tickets are sold remained open, offering an entertainment experience in scratch-off form.

So what exactly happens to that money after it’s inserted in the blue machine? The N.C. General Assembly ultimately decides.

Legislators allocate money from the lottery into six main categories: free pre-K, college scholarships, financial aid, paying non-instructional staff, covering costs of transportation and school construction. Plus, around $31 million annually contributes to staffing and transportation costs at charter schools and tens of millions are allocated to a needs-based grant program to help rural, less prosperous communities build schools.

School construction

School construction is the one category of funding local officials have the most say in.

In fiscal year 2019-20, school districts statewide received a total of $100 million to construct new buildings or repair existing ones.

The New Hanover County Board of Education and Board of Commissioners allocated its money that year toward the third phase of renovations at SEA Tech High School, costing $1,226,900, as well as a $585,00 installation of a cooling tower at Laney High and $86,100 upgrades to the Minnie Evans Art Center, next to Eugene Ashley High School.

In fiscal year 2020-21, New Hanover County Schools (NHCS) is allotting $2.4 million in state lottery funds to various projects, from HVAC replacements at several schools to roof upgrades at Alderman Elementary.

One million is going toward safety and security improvements. The district is slowly working toward securing entrances with entrance renovations at all its schools. The project is expected to take 10 years.

Some of the newer schools already feature entryways that require visitors to undergo a two-step verification process. In those buildings, guests arriving on campuses would first speak to the receptionist through an intercom before stepping foot into the building. The receptionists would choose to unlock the door and let the visitor move into a secure room so staff could identify and study the demeanor of the guest through the glass before granting entry into the front office.

Designs are underway and construction will begin this summer for improvements at Lake Forest Academy and J.C. Roe Center.

Meanwhile, Pender and Brunswick schools are putting all their construction money from the lottery toward debts.

Every year since 2016, Brunswick County has allocated lottery funds toward annual debt service. Last year the county received more than $900,000, which was used to offset limited obligation bonds annual debt service that funded the 12-classroom addition to North Brunswick High School and a building replacement at Waccamaw School.

In fiscal year 2019-20, Pender County accepted $686,224 for facilities, according to a report provided by the N.C. Lottery. The schools used the money to help pay off the $75-million bond debt accrued for the construction of Penderlea and Surf City K-8 schools years back.

Wednesday morning, two North Carolina senators filed a bill to authorize sport wagering and use an 8% sales tax on gambling operators to create more funding sources for school construction projects, The News and Observer reported.

Staff salaries, transportation costs

The salaries of custodians, office assistants and other non-instructional staff are mainly covered by the lottery. In fact, it’s the largest category of lottery money spending.

In fiscal year 2020, nearly 60% of the money allocated to NHCS went toward staffing non-instructional personnel. That’s a total of $6.5 million.

Brunswick County was allocated $3.1 million and Pender received $2.3 million for employee payouts.

The lottery also contributes money to the state public school fund for transportation costs, such as bus driver salaries and gas. New Hanover County was allocated $302,847, while Brunswick was given $227,932 and Pender got $120,638.

Aiding students

The lottery also supports students through their learning careers, from early to higher education.

In New Hanover County, 270 4-year-olds were enrolled in preschool last year at no charge. The funds from the lottery covered the cost: $1.5 million.

The lottery also sent 118 at-risk children to pre-K in Brunswick County, costing $826,508, and covered the $687,382 bill for 139 preschoolers in Pender County.

The money raised by the lottery also awards scholarships and helps students bear the cost of college through the UNC Need-Based Grant Program.

New Hanover County students received 531 scholarships worth $558,876 in fiscal year 2020. Brunswick County students were awarded 196 scholarships, totaling $211,085. In Pender County, 123 students received awards, costing $125,457.

UNC needs-based aid was gifted to 1,358 New Hanover County students, 440 Brunswick County students and 296 Pender County students in fiscal year 2020. In total, $400,000 was spent on financial aid in the tri-county area.


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