Lt. Governor Casey Cagle and Senate Majority Leader Bill Cowsert (R-Athens) announce the filing of legislation that will ensure pre-K and higher-education for children and young adults is funded at the highest possible level. Senate Bill 5, the fifth of the Senate Republican Caucus’ six legislative priorities, will raise Lottery returns to the state’s pre-K and HOPE programs.

Current law requires the lottery to deliver “as nearly as practical” 35 percent of gross sales as profits; however the lottery has not hit that number since 1997. Actual performance has hovered near 25 percent returns for many years. Although increased returns to the state can theoretically reduce overall sales – by decreasing funds for administration, marketing, and prize payouts – recent studies show that Georgia’s Lottery can increase the return percentage to HOPE without adverse effects on sales.

“Our goal is to make certain that we find that economic ‘sweet spot,’ where returns are maximized to pre-K and HOPE without significant reductions in overall sales,” said Sen. Cowsert. “Through a simple empirical formula, we are going to find that spot. Any adverse changes to the Lottery’s sustainability will be detected, and our formulas can be altered, quickly and easily.”

Currently, the Lottery returns slightly more than 25 percent of its sales to the state for pre-K and HOPE programs. Through Senate Bill 5, state law will require the Lottery to return 26 percent of gross sales to the state in fiscal year 2018. In fiscal year 2019, the Lottery will be required to return 28 percent of sales to the state. In 2020, the Lottery will be required to return 30 percent of sales to the state. In any year, if ticket sales drop by 5 percent or more, the percent return will be frozen and no further increase will be required.

“Since its inception, Georgia’s HOPE scholarship and pre-K program have provided educational opportunities for millions of Georgian’s and their families,” said Lt. Governor Cagle. “It is our hope this legislation will generate additional funds for these critical education initiatives and provide long term sustainability to the programs.”

A 1-percent increase in returns can add as much as $40 million annually to pre-K and HOPE programs.