RALEIGH: Memo: NC lottery can't reach House funding demand - WSLS 10 NBC in Roanoke/Lynchburg Va

Memo: NC lottery can't reach House funding demand

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RALEIGH, N.C. -

Advertising changes for North Carolina's lottery that House budget writers wanted to help fund teacher pay raises next year would leave them short of their funding target, the legislature's top economist said Friday.

Staff member Barry Boardman said the lottery should generate $32.7 million in extra profits next year beyond what was anticipated, according to his memo to legislative leaders. But the changes to advertising that House Republicans endorsed last week might generate $29.6 million, he wrote in a separate memo.

Next year's lottery numbers are important as House and Senate negotiators decide soon if lottery money will be earmarked for teacher salary increases. The two chambers have passed rival government spending plans for the fiscal year starting July 1, each of them about $21.1 billion.

House budget writers planned for $106 million more net profits by doubling the limit on advertising spending while restricting ad content and placement. It was a goal that North Carolina Education Lottery Executive Director Alice Garland told senators this week couldn't be met due to the restrictions. Lottery ads would be banned during college sporting events, while billboards and store signs would have to include two amounts for multistate jackpots. Garland estimated a $59 million net profit with the advertising changes.

The House budget relied on the additional lottery money through advertising to fund an average increase in teacher pay of 5 percent.

The Senate had its own plan to raise salaries by an average of 11 percent.

Senate Republicans berated the House advertising changes as counterproductive - spending more money to encourage play of its instant ticket and number draw games while discouraging their play at the same time. Gov. Pat McCrory, a Republican who will be asked to sign any final budget bill into law, also expressed reservations this week about the House lottery numbers.

Even without the ad changes, Boardman wrote, the legislature's Fiscal Research Division and McCrory's state budget office now predict the lottery will generate $520.6 million next year for the state, compared to the $488 million projected in April.

The upgrade is attributed to consistently strong instant ticket sales, the successful rollout of a new draw game and another draw game that is being introduced next year earlier than anticipated, Boardman wrote.

The lottery profits are spent on various education initiatives, including $221 million toward teacher salaries during this fiscal year.

Copyright 2014 The Associated Press. All rights reserved.

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