The Georgia lottery and state appropriations for education: Substitution or additional funding?

Abstract

This article examines the use of lottery proceeds for funding public education in Georgia, with specific focus on the state’s effort to guard against fungibility of lottery proceeds. The Georgia lottery earmarks proceeds for education and Georgia is among the states requiring a high level of transparency at each stage of the budget and appropriations process. Based upon comparisons of spending before and after the lottery was put in place, we conclude that lottery spending has not been completely offset by substitution. Lottery funds appear to have stimulated additional spending in the target areas. Budget fungibility has been constrained by the transparency of the budget and appropriations process, gubernatorial commitment to supplement not supplant, the policy architecture of the lottery–for–education program, and a relatively strong state economy that renders substitution unnecessary. © 2002 Blackwell Publishers Inc.