How much lottery money reaches Michigan classrooms?
Michigan’s “lottery for schools” message is often understood as a straightforward pipeline from ticket purchases to K-12 classrooms, but Bridge Michigan’s math, distributed by The Associated Press, shows a more complicated set of steps before any lottery money can reach students.
The analysis centered on the state’s annual announcements about lottery funding, including Gov. Gretchen Whitmer’s statement that for the seventh year in a row the lottery contributed more than $1 billion to the School Aid Fund. It then broke down why “buying a $1 scratch-off” does not mean $1 ends up in school spending, because ticket sales are first allocated to prizes, sales commissions, and administrative operations.
Bridge Michigan said that for every $1 spent on a lottery ticket, 63 cents goes toward prizes, nine cents goes toward lottery sales commissions, and 3 cents goes to operations and administration. After those costs, the analysis said about a quarter of each $1 spent is what remains for the Michigan School Aid Fund.
From there, the analysis emphasized that the School Aid Fund is a broader financing pot than lottery ticket revenue alone. Bridge Michigan reported that lottery proceeds account for less than 6% of the School Aid Fund and that the fund has also supported community college and public universities for more than a decade.
What happens once money is in the School Aid Fund
Bridge Michigan described the School Aid Fund as including sales, income and property tax revenue, which the state uses for K-12 schools and some early childhood programs. However, once money arrives at the local school-district level, how it is spent can vary, since districts combine state funds with other revenue streams to support salaries and benefits, transportation, materials and other expenses.
To estimate how much of the lottery-linked portion ultimately supports preK-12, the analysis used what it called “back of the napkin” math. Bridge Michigan said the 25 cents associated with lottery spending that makes it into the School Aid Fund can be treated as about 22 cents for preK-12 programs once categories tied to community colleges, universities and debt payments for public school employee pension costs are stripped out.
Bridge Michigan put that estimate in context with the state’s fiscal-year figures. It said that after excluding those non-preK-12 uses, about 88% of the $18.6 billion School Aid Fund in fiscal 2025 went toward preK-12 programs—an arithmetic path that the analysis translated into the “22 cents out of every quarter” framing.
How the lottery compares with the overall education revenue picture
Bridge Michigan also compared lottery contributions to the size of state revenue received by school districts. It said that during the 2023-2024 year, public school districts reported a total of $15.48 billion in state revenue. For fiscal year 2024, the analysis reported that the lottery contributed nearly $1.25 billion to the School Aid Fund, describing that as about 8% of the state revenue schools received that year.
The analysis also said that the most recent lottery contribution was below the prior year’s total, and that this year’s unaudited lottery amount was the lowest since fiscal year 2019. It pointed to a possible reason based on affordability and consumer behavior: as prices on other goods rise, consumers may decide they can no longer afford lottery tickets.
Craig Thiel, research director of the Citizens Research Council of Michigan, also suggested the lottery faces more competition for gambling spending now than when the lottery was created in 1972. Thiel said Michigan has authorized Native American casinos and non-tribal casinos, and that it also has online sports betting, poker and other games, describing the lottery as “kind of a small minnow in a tank with a whole bunch of other fish.”
Why colleges and universities get School Aid Fund money
A key part of Bridge Michigan’s explanation for why less than a simple fraction of lottery spending reaches K-12 classrooms involved the legal rules about what the School Aid Fund can be used for. The analysis cited the state Constitution’s language that the fund “shall be used exclusively for aid to school districts, higher education, and school employees’ retirement systems, as provided by law.”
Bridge Michigan said a misconception is common that the lottery’s school funding is only for K-12 schools, but it pointed to the constitutional allowance for higher education as the reason colleges and universities receive money from the fund. It also described an objection from Robert McCann, executive director of The K-12 Alliance of Michigan, a group of 123 school districts, who said School Aid dollars should be exclusively used for public school districts.
McCann said, “It’s just getting siphoned out of the schools in fact so that they can spend it elsewhere,” arguing against how money is allocated under the fund’s permitted uses.