BuSiNeSS PlAN - California Lottery

1.1 Creation andPurpose of the LotteryIn 1984, voters passed Proposition 37 and created the California StateLottery. The purpose of the CSL is to provide supplemental funding forthe benefit of public education without the imposition of increased taxes.The Lottery Act (California Government Code Section 8880 et seq.)provides that net revenues of the CSL shall not be used as substitutefunds, but rather shall supplement the total amount of money allocatedfor public education in California.The Lottery Act provides that the CSL shall be initiated and operatedso as to produce the maximum amount of net revenues to supplementthe total amount of money allocated for public education in California.The Lottery Act also provides that the CSL shall be operated to promoteand ensure integrity, security, honesty, and fairness.CSL revenues are distributed as follows: as nearly as practical 50% mustbe returned to the public as prizes; at least 34% must be distributed to publiceducation; and no more than 16% may be used for administrative expenses.The Lottery Act providesthat funds shall be usedexclusively for the educationof pupils and studentsand that no funds shall bespent of the acquisition ofreal property, constructionof facilities, financing ofresearch, or any othernon-instructional purpose.The Lottery Act provides that none of its provisions may be changedexcept to further its purpose by a two-thirds vote of the membershipof both houses of the Legislature and approved by the Governor.The Lottery Act specifies that the CSL is overseen by a five-memberCommission appointed by the Governor and confirmed by the Senate.A Director, who is also appointed by the Governor and confirmed bythe Senate, serves as the chief administrator of the CSL.1.2 BeneficiariesThe CSL’s mandate is to provide supplementalfunds to public education on all levels from kindergartenthrough higher education plus severalspecialized schools.The educational institutions which receive lotteryfunds and the approximate percentage of overalllottery funds they receive are shown in Figure 1.1California schools put lottery funds to a varietyof uses including funding field trips, specialeducation, classroom technology, staffdevelopment, and the purchase of specializedequipment for disabled students.California Lottery 2007–2010 Business Plan – –