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Massachusetts legislators looking into fairness of lottery fund distribution

May 29, 2019, 8:00 am

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Massachusetts LotteryMassachusetts Lottery: Massachusetts legislators looking into fairness of lottery fund distributionRating:

BOSTON, Mass. — Massachusetts residents have been playing the lottery for nearly 50 years, enjoying both the risk and the benefits their towns and cities see. But some legislators are worried certain communities are getting more out of the game than others.

Every year, about 20% of the revenue the state lottery rakes in is distributed to the 351 towns and cities, according to the Massachusetts State Lottery's website. In 2018, the lottery returned $997 million to the state, which was the second-highest total in the commonwealth's history, a lottery statement said.

"The Lottery's performance is critically important to every city and town in the commonwealth," Treasurer Deb Goldberg, the chair of the Massachusetts State Lottery Commission, said in the 2018 statement. "I am proud of the work the lottery team and our dedicated retail partners have done to deliver over $2 billion in essential funding for unrestricted local aid over the last two years."

In the past, communities have used lottery money on snow removal projects, local road improvements, school services, programs for seniors, and parks and recreation projects, according to the lottery website.

But while all municipalities receive help, some legislators are arguing the breakdown isn't completely fair.

Rep. Andy Vargas, D-Haverhill, said the distribution process among cities and towns — which was laid out by the state Legislature years ago — has "produced tremendous inequities."

Haverhill is one of the cities that puts much more into the lottery fund than it receives, Vargas said. From 2013 to 2017, the city contributed a total of $270.3 million to the fund and got $44.1 million back — about 16% of its contribution - according to a 2018 WBUR graphic.

Vargas drew attention to the challenge especially faced by older, mid-sized cities.

"I think what's important to note is that Gateway Cities like Haverhill have less of an ability to raise revenue locally because our property values aren't as high as Boston or other places across the commonwealth that can lean on property taxes to fund critical city/town services," Vargas wrote in an email.

Fueled by these frustrations, Vargas — along with Rep. Antonio Cabral, D-New Bedford — filed legislation this session to create a commission to study and establish recommendations for a new local aid formula. The bill, he said, would study the distribution of general aid in Massachusetts, including that generated by lottery revenue.

"Specifically, the commission will study the amount of aid allocated to cities and towns, how the aid allocated matches up with the needs of the municipality, inequities across the state in regards to allocation, feasibility of accounting for changes in municipalities' tax bases when allocating aid, and alternative formulas that may produce a more equitable allocation across the state," Vargas wrote.

If the bill passes, the commission would aim to complete and submit their report by March 2020, he said.

The original formula — which according to a lottery spokeswoman was initially crafted by the Legislature in 1972 — was dependent on population numbers and property value. It hasn't been used since fiscal year 2010, according to a spokeswoman for Cabral. Still, legislators aren't happy with the current distribution process.

Every year, each community sees the same percentage increase — usually reflective of revenue growth — in their local aid package. Theoretically, the distribution process should work, Cabral said, but it doesn't take into consideration a municipality's ability to raise revenues. It only looks at the fixed costs of the city or town, he said, making it harder on communities that can't easily raise revenue locally.

The bill he and Vargas are proposing would change that.

This burden to change the outdated formula falls completely on the Legislature - the Massachusetts State Lottery doesn't have any input in the distribution of local aid, the lottery spokeswoman said. The agency is required to deposit its net proceeds into the commonwealth's general fund. Local aid is then distributed to municipalities by the Department of Revenue, according to the current formula.

"Lottery funds are distributed as part of the Unrestricted General Government Aid, which is subject to annual appropriation," a DOR spokeswoman said in a statement.

While neither the lottery nor the treasurer's office has control over the distribution formula, Emma Sands, a spokeswoman for Goldberg, said one of the goals this year is to continue emphasizing the importance of local aid.

"Our priority this session is focused on working with the Legislature to ensure modernization and growth of the Lottery, in order to maintain profits, stay relevant, and deliver maximum local aid dollars to communities throughout the state," Sands said in a statement.

Several legislators who signed on to support the Vargas's and Cabral's bill are hoping to act fast.

Rep. Aaron Vega, D-Holyoke, said he feels his district — which falls in another Gateway City — gets a much worse end of the bargain.

In Holyoke, residents contributed $138.4 million to the lottery from 2013 to 2017, WBUR reported. The town received a total of $45.5 million back.

"There could be the argument that districts that are supporting these revenues should get a little bit more," Vega said. "It should go to communities most in need."

But while he was happy to support Vargas's and Cabral's bill, he said he remains cautiously optimistic about the legislation.

"That's the right way to do things, but there's always a little bit of pessimism with that kind of process... How long will it take? Commission of who? How will it be represented?" he said.

Regardless, receiving more aid from the lottery would be an enormous help to his district, he said.

"Increased local aid for Holyoke could help us out with capital investments," Vega said. "Every year, we're buying new police cars, new fire trucks ... But we have no capital accounts and it all falls on us. We have no flex in our budget to really save or plan for a rainy day or plan for some catastrophe."

But even the commonwealth's biggest cities — like the state capital — seem to be receiving less lottery aid than they deserve, said Rep. Russell Holmes, D-Boston.

Boston by far contributes the most to the lottery fund — $2.7 billion between 2013 and 2017 — and received $849.6 million back. While Holmes acknowledged it was a large sum, it wasn't nearly close to the amount Boston residents were putting in.

"We should share with one another, but someone who's putting zero in should not get $6 million out... There should be a balance," Holmes said. "They're taking the proceeds of poor cities and giving them to richer cities... All of it goes to my police, my fire, my transportation, garbage pickup. All of those dollars go into the general fund and are used to improve the lives of people in this city."

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13 comments. Last comment 1 year ago by Soledad.
Page 1 of 1
CDanaT's avatar - Nolz june15.jpg
Central TN
United States
Member #121189
January 4, 2012
4746 Posts
Offline

The liberal Democratic bastion of Massachusetts is upset over the income redistribution program ? How can this be ? After all you voted for this puppy and its creation. It was your job to maintain it properly. This is what liberal redistribution is all about. The Cash Cow never running dry, getting your "fair share", right ? Look at the Representatives  complaining. What letter do they all share in common? Looks like a "D" to me. Now you want to "study the distribution of general aid in Mass, including that generated by lottery revenue"... Bless your little hearts

Integrity: There is just no substitute.

    music*'s avatar - DiscoBallGlowing
    USN United States Navy
    Fresno, California
    United States
    Member #157851
    August 2, 2014
    3959 Posts
    Offline

    These problems are being solved by representatives of the people there in Massachusetts and not by Washington D.C. 

     As far as I know the elections have been free and fair. Now the politicians want fair distributions of the lottery proceeds. 

     Massachusetts lottery players spend a lot of money on the games. They might be #1 in the ranks of who spends more. 

    Patriot

     "We are all in this together!" 

      Avatar
      Simpsonville
      United States
      Member #163184
      January 22, 2015
      2258 Posts
      Offline

      Though this article does not address it, a couple of years ago the same thing crept up.  One small town didn't even have a lottery seller in it, yet got $$ just the same and they were upset about that.  The concept is to benefit all 351 towns and cities in Massachusetts. 

       

      What does Tennessee do with their lottery ticket profits??   CDana can enlighten me on that; our lottery is much larger than yours will ever be.

        brees2012's avatar - animal whale.jpg

        United States
        Member #125173
        March 26, 2012
        287 Posts
        Offline

        Why does "some " States win more than other States ????

        Noticed this a lot !!!! 

        Ready To Win ....

          CDanaT's avatar - Nolz june15.jpg
          Central TN
          United States
          Member #121189
          January 4, 2012
          4746 Posts
          Offline

          Though this article does not address it, a couple of years ago the same thing crept up.  One small town didn't even have a lottery seller in it, yet got $$ just the same and they were upset about that.  The concept is to benefit all 351 towns and cities in Massachusetts. 

           

          What does Tennessee do with their lottery ticket profits??   CDana can enlighten me on that; our lottery is much larger than yours will ever be.

          BD, I can only relay to you what is reported by the commission. 

          https://www.tnlottery.com/sites/default/files/2019-01/FY18%20TN%20Lottery%20Annual%20Report%20Highlights_0.pdf

          It does not appear that the commission gives back to the "general fund" in any publication, just the education fund of the state budget, I have found at this time. They allegedly did $1.73 Billion in total sales for 2018. Out of that $1.09 Billion was awarded in Prizes back to the players, $421.7 Million was for all funded education programs. The breakdown is 26% to education, 4% to operations, 7% to retailers and 63% to prizes.(allegedly)

          Integrity: There is just no substitute.

            cottoneyedjoe's avatar - cuonvFT

            United States
            Member #197033
            March 28, 2019
            541 Posts
            Offline

            Though this article does not address it, a couple of years ago the same thing crept up.  One small town didn't even have a lottery seller in it, yet got $$ just the same and they were upset about that.  The concept is to benefit all 351 towns and cities in Massachusetts. 

             

            What does Tennessee do with their lottery ticket profits??   CDana can enlighten me on that; our lottery is much larger than yours will ever be.

            This raises an interesting point. At least a few people from that town must play the lottery and are forced to buy them in nearby towns and cities. And people who live in one locale and commute to another for work probably buy them in the city where they work just as much as (if not more than) where they live. Similarly, people who live outside of Boston probably buy them in Boston when they are visiting for tourism.

            A fair distribution of funds must take into account not only where the tickets are purchased, but also where the players actually live. But it's impossible to know just how many lottery purchases are made by people living in the same place they buy tickets, so it's going to be very difficult to come up with a distribution that seems fair to most people.

              dpoly1's avatar - driver
              PA
              United States
              Member #66139
              October 16, 2008
              1989 Posts
              Offline

              "Everything is not fair" LOL No Pity!

              dpoly1 - Playing the lottery to save the jobs of those that build, transport, sell & maintain luxury items! -

               

              Eschew Poverty ........... Vote Conservative!

                Avatar
                Simpsonville
                United States
                Member #163184
                January 22, 2015
                2258 Posts
                Offline

                A little off subject.  Some months ago had written a letter to the State Treasurer Deb Goldberg.  Usual experience is an actual letter vs. an email usually gets a response.  She's all for on-line lottery like we have here in KY and wrote to say that is the way to go.  No response whatsoever from her or their office.  So perhaps the formula for dispersion needs to be updated?

                  Avatar
                  Northern Beaches
                  Australia
                  Member #187037
                  January 9, 2018
                  125 Posts
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                  Massachusetts should follow New York's example and introduce an online subscription service. It would be very convenient for subscribers and raise additional revenue.

                    Avatar
                    Simpsonville
                    United States
                    Member #163184
                    January 22, 2015
                    2258 Posts
                    Offline

                    Massachusetts should follow New York's example and introduce an online subscription service. It would be very convenient for subscribers and raise additional revenue.

                    I agree wholeheartedly.  Unfortunately they are still stuck in many ways to their Puritanical ways when they feel like it.  For instance when the DNC was held there for Obama's first term, the DNC begged them to not have bar closures @ 0100 hours.  Did they?  NO!  Just this past week they did allow the yet to open Encore Casino in Everett (next to Boston) to serve alcohol until 0400.  Yet they can be on the forefront for healthcare coverage and same sex marriage, both firsts in this country...like I said when they want to.  It'll take loss of lottery sales to finally get on-line sales there it appears.

                      reddog's avatar - rickyavatar4
                      Durham, North Carolina
                      United States
                      Member #1616
                      June 5, 2003
                      2869 Posts
                      Offline

                      N.C. needs to be looked at also. Cool

                      Taking it one drawing at a time.

                        sweetie7398's avatar - flower2
                        100

                        United States
                        Member #22701
                        September 30, 2005
                        13335 Posts
                        Offline

                        Massachusetts should follow New York's example and introduce an online subscription service. It would be very convenient for subscribers and raise additional revenue.

                        Good idea.

                        Life, love, family Love

                          Avatar
                          100
                          New York, NY
                          United States
                          Member #140630
                          March 23, 2013
                          10650 Posts
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                          Most funds from a “lottery” (it should be called tax, but that would hurt sales), are generally put into a general state fund. From there the money can be used for anything. All the “pet causes” of the lottery such as education may see no effect from its lottery’s millions of dollars. Same way most don’t see any effect from buying a ticket. But hey it’s for entertainment right, so what’s the harm. Most states would be better off without a lottery given a few years. The lottery money makes no difference at all. That’s the truth no matter what you hear. Because with all that lottery cash, the legislators can and do give out fewer government funds.

                          Sometimes you do the right thing just because it’s right.