Did Powerball help wildlife?

Editor

St. Paul So how much money did lottery mania generate for
Minnesota’s natural resource funding in the past few weeks?

While Minnesota’s fish and wildlife species definitely will
benefit from the recent Powerball craze, they probably won’t be
taking an early retirement. Here’s the basic breakdown, courtesy of
the Debbie Hoffmann, public relations manager for the Minnesota
State Lottery.

Nationwide, the 21 states and Washington D.C. that participate
in Powerball generated $609 million in sales during the recent June
30 to Aug. 25 sales period. Minnesota environmental programs only
benefit from sales that take place within the state, and
Minnesota’s Powerball total topped out at $25 million.

Of that, about 16 cents on the dollar will enter environmental
programs, or about $4 million. The other 84 cents goes toward
prizes, retailer commissions, compulsive gambling programs and
gambling enforcement, and operating expenses.

If that 16 cents on the dollar strikes you as low, recognize
that it was even smaller before the 2000 Legislature rededicated
the 6.5 percent sales tax toward environmental programs. Prior to
that, the sales tax portion of the lottery ticket went directly
into the state’s General Fund.

Thanks to the work of outdoor groups and conservation-friendly
legislators, that sales tax portion about 6.5 cents on the dollar
is now evenly divided into the Natural Resources Fund and the Game
and Fish Fund. Fish and Wildlife Programs as well as state and
metro parks, and zoos all benefit from that rededication.

In Fiscal Year 2001, the first year to benefit from the
rededication, that lottery-in-lieu portion generated a total of $23
million for the two funds.

Powerball, which represents just over 20 percent of state
lottery sales, has less prize money associated with it, so it
actually benefits the environment more than scratch-off games.
Those tickets have more overhead associated with them, explained
Don Feeney, director for research and planning for the Minnesota
State Lottery.

Factoring in the lower profit margins from all games, the
Environmental Trust Fund has received on average 6.7 cents on the
lottery dollar since its inception. Recent years have pulled that
average down, with FY2000 and 2001 averaging 5.9 percent, said to
Susan Thornton, manager of research and planning for the
Legislative Commission on Minnesota Resources, which distributes
ETF revenues.

In FY2001, the ETF received $22.4 million in lottery proceeds.
State law dictates that the LCMR can spend 5.5 percent of the
market value of the Fund each biennium for environmental grants.
The ETF principal currently has approximately $300 million in it,
and the LCMR allocated about $34.6 million from the Fund for the
2002-03 biennium.

Outdoors and environmental groups apply for the money, and a
bipartisan commission of legislators divvies it out each year. For
the current biennium, the LCMR funded 56 projects from 405
applicants, including the $11.7 million corridors projects brought
forth by the Minnesota Waterfowl Association and other conservation
groups. Other grants place less emphasis on wildlife or
conservation, a criticism LCMR funding has received for years.

Boiling it all down

So just how much does the lottery generate for the environment
each year? Consider FY2001, the most recent year for which lottery
figures are available.

From $366 million in total lottery sales in FY2001, the
“environment” received $45.4 million $22.4 million to ETF, and
about $23 million via the lottery-in-lieu.

So while the recent Powerball jackpot moved a cool $4 million
toward environmental funding, other factors could temper whether or
not that figure results in significantly more on-the-ground
funding. Bad weather or economics could play a role in year-end
lottery sales and the environmental funding it ultimately
generates.

“The fiscal year just started July 1, so we still have a long
way to go, Hoffmann said. “Storms, blizzards, and floods could
still affect sales. But right now, we’re starting out on a high
level.”