Fiscal impacts of the state lottery on educational expenditures in Florida school districts
Ryu, Eungha Jay
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When state indirect educational expenditures to local school districts and local educational expenditures are separated to avoid the aggregation bias, and selected rival histories with educational expenditures are controlled for to analyze lottery fungibility in Florida, it is shown that there is some fungibility of lottery proceeds earmarked for public PK-12 education. Lottery dollars are only partly used as expected at the state level. By contrast, lottery proceeds earmarked for public PK-12 education stimulate local educational expenditures in the short run although they begin to decline in the long run. A lesser degree of lottery fungibility is found at the local level with temporary increases in public PK-12 educational expenditures. The overall finding implies that lottery proceeds earmarked for public education may have been used as a fiscal mechanism by which Florida legislators shift the fiscal burden of public PK-12 education to local school districts.