Prior to the beginning of each odd-numbered year regular session of the Legislative Assembly, the Legislative Fiscal Office is required to conduct a study that reports the preceding two year’s administrative costs and the transfer rate of the Oregon State Lottery, in order to determine if additional funds may be made available for public purposes. Lottery’s administrative costs as a percentage of revenues for fiscal years 2019 and 2020 were 3.1% and 3.4%, respectively, and actual public purpose transfers averaged 5.9% of direct revenues in the prior two years.

Lottery revenues are generated through traditional, sports betting, and video lottery games. Initially, lottery revenues were dedicated to the creation of jobs and economic development. However, voters have approved subsequent ballot measures adding public education, restoration and protection of Oregon’s parks, beaches, watersheds, and native fish and wildlife, veterans, and outdoor school as additional required or authorized uses of lottery revenues.

The Oregon Constitution includes the following dedicated transfers:

• Education Stability Fund (18%)
• Parks and Natural Resources Fund (15%)
• Veterans’ Services Fund (1.5%)

Oregon statute establishes the following six dedications of net lottery proceeds:

• outdoor school education programs (4%, up to a maximum of $5.5 million per quarter adjusted for inflation),
• county economic development programs (2.5% of net video lottery receipts),
• gambling addiction treatment programs (1%),
• public university sports programs and academic scholarships (1%),
• county fair programs (1%, up to a maximum of $1.53 million annually adjusted for inflation), and
• match for qualifying employer lump-sum payments to the Public Employees Retirement System Employer Incentive Fund (net proceeds of sports betting games).

Nearly all of these funds are "fungible" which means that they can be replaced by another funding source. So, when lottery funds go to the Education Stability Fund, for instance, every dollar that's allocated there can be one dollar of general fund money that doesn't have to be allocated and is freed up to be spent elsewhere.


--Staff Reports

Post Date: 2021-05-10 15:18:49

Last Update: 2021-05-10 15:41:10