PROPOSED CONSTITUTIONAL AMENDMENT
Lottery Proceeds Fund
Article X, Taxation and Finance
New Section 7-A
BALLOT QUESTION
"Shall the Constitution of Virginia be amended to provide for a Lottery Proceeds Fund and the distribution of net lottery revenues to the localities to spend for public education purposes?"
FULL TEXT OF AMENDMENT
“Amend the Constitution of Virginia by adding in Article X a section numbered 7-A as follows:
“ARTICLE X
“TAXATION AND FINANCE
“Section 7-A. Lottery Proceeds Fund; distribution of lottery revenues.
“The General Assembly shall establish the Lottery Proceeds Fund. The Fund shall consist of the net revenues of any lottery conducted by the Commonwealth. Lottery proceeds shall be appropriated from the Fund to the Commonwealth's counties, cities and towns, and the school divisions thereof, to be expended for the purposes of public education.
“Any county, city, or town which accepts a distribution from the Fund shall provide its portion of the cost of maintaining an educational program meeting the standards of quality prescribed pursuant to Section 2 of Article VIII of this Constitution without the use of distributions from the Fund.
“The General Assembly shall enact such laws as may be necessary to implement the Fund and the provisions of this section.
“The General Assembly may appropriate amounts from the Fund for other purposes only by a vote of four-fifths of the members voting in each house, the name of each member voting and how he voted to be recorded in the journal of the house.”
EXPLANATION
Present Constitution and Background
In 1970, Virginia voters approved the repeal of a constitutional ban on state-run lotteries. In 1987, the General Assembly passed the law that established the present lottery system. That law also required voter approval, and voters did approve a state-operated lottery that November.
The present Constitution does not specify how a lottery should be operated or how lottery revenues should be spent. These questions are decided by laws passed by the General Assembly. Under the present State Lottery Law, the State Lottery Department runs the lottery. The lottery revenues are used as the General Assembly provides by law and in the biennial budget and appropriation acts.
Annual sales of lottery tickets in recent years have ranged from $900 million to $973 million. After prize payments and administrative costs, annual revenues to the Commonwealth have ranged from a low of $140 million in fiscal year 1989 to a high of $342.5 million in fiscal year 1997. The most recent turnover to the Commonwealth was $323.5 million in fiscal year 2000.
The Commonwealth has used lottery proceeds in different ways spelled out by the General Assembly by law and in the biennial budget and appropriation acts. Proceeds in 1989 were used for capital construction projects. From 1990 to 1998, the lottery proceeds were transferred to the Commonwealth’s general fund. Starting in 1999, lottery proceeds were distributed to local public school divisions to be used solely for education purposes.
The proposed amendment requires the General Assembly to establish a Lottery Proceeds Fund where the Commonwealth must put the net revenues from any state-run lottery. Lottery proceeds in the Fund must be distributed to counties, cities, and towns, and their school divisions, to be spent locally for public education. The General Assembly will no longer have the broad discretion it has now to appropriate the lottery profits for any public purpose.
The General Assembly will be able to appropriate money from the Fund and not distribute it to the localities only in exceptional cases. Four-fifths of the members voting in each house of the General Assembly must agree to appropriate lottery proceeds from the Fund in such an exceptional case.
The proposed amendment requires localities to use the Fund money appropriated to them for public education purposes. A locality that accepts a share of the lottery proceeds must maintain its local share of education expenses to meet the state standards of quality for school divisions, without using lottery proceeds to do so. The amendment also requires the General Assembly to pass laws necessary to establish the Fund and implement the new constitutional provision.
If the voters approve the proposed amendment, it will take effect July 1, 2001.