The first: “When the Michigan Lottery ticket sales went into being the proceeds were ear-marked for education. Whatever happened to the proceeds? Where do they go and who benefits?”
And the second: “How much of the lottery money actually goes to my local school? How are the allocations determined?”
Related:
Since 1972, all proceeds from the Michigan Lottery have gone toward the Michigan School Aid Fund, a budget that pays for public school operations.
Over the years, proceeds to the fund have totaled more than $28 billion. Lottery officials make sure residents know that, with advertising that ticks off the total dollars the games’ proceeds have provided to classrooms across the state.
But that tally spans a half century. Last year alone, the state’s K-12 budget was $24 billion, so it takes a lot more than scratch-off tickets to fund schools.
Let’s break it down.
Does the lottery fund Michigan schools?
Lottery proceeds go to the Michigan School Aid Fund, contributing more than $1.3 billion last year. That’s about 5% of the fund.
How much of lottery spending goes to schools?
About 27 cents of every dollar spent on the lottery in Michigan goes to schools. The rest: 61 cents goes toward prizes, 9 cents toward retail and vendors and 3 cents to lottery operations.
For example, in 2023, total lottery sales were $4.9 billion. Of this, about $3 billion went to prizes, $441 million went to retail and vendors while $147 million went to operations. This left $1.3 billion for the school aid fund.
Do all the net proceeds go to K-12 schools?
A common misconception is that all $1.3 billion of last year’s lottery proceeds go toward K-12 education.
This was the case until an “economic downturn in 2010,” according to Robert McCann, the executive director at K-12 Alliance of Michigan.
Today, lottery proceeds are spent primarily on K-12, but also on the state’s public colleges and universities and pre-K.
“Every year since, they have taken what is totaled up to the billions of dollars out of the School Aid Fund that traditionally had gone only to our K-12 schools and spent it on what used to be programs funded by the general fund, but again, primarily universities and community colleges,” McCann said.
