Where Does Arizona’s Lottery Revenue Go?

(Source: Arizona Republic,  July 1, 2016) – The Arizona Lottery celebrates its 35th anniversary Friday.  And while that has meant 35 years of big dreams, winning tickets and some dashed hopes, it has also meant 35 years of increased revenue flowing into the state coffers.

Since  the Arizona Lottery’s launch on July 1, 1981, its sales revenue has totaled $11 billion, with nearly $3.5 billion of that directed back into state funds and programs. While a majority — and growing — portion of that money has gone into the general fund where the governor and Legislature canThis was the first Arizona Lottery ticket. spend it as they choose, about $1.8 billion has been returned to Arizona communities through grants and programs that help people who are homeless, victims of domestic abuse and children in the foster care system.

“Whenever you hear lottery, people always think about jackpots and what they’re going to do with the dollars,” lottery executive director Gregory Edgar said. “But for us, it’s drilling into the numbers and seeing the impact we can have in our community. The investment of $3.5 billion over 35 years is a pretty significant impact.

Changing agendas

  • 1980: Arizona voters approved the creation of the Arizona Lottery by a narrow margin. Ballot literature promised proceeds would “pay for law enforcement, health services, education and other vital programs.” But the original proposition wording required only that at least 30 percent of revenue go into the general fund.
  • 1990: Voters required that $20 million in lottery revenue a year go into heritage funds for Arizona State Parks and the Arizona Game and Fish Department.
  • 1993: Lawmakers required up to $23 million a year in lottery revenue to be put into a fund for local transit projects and up to $7.6 million a year to be divided among counties.
  • 1996: Voters required that $17 million in revenue be spent annually on specific health and social-service programs, including teen-pregnancy prevention, food assistance for infants and mothers, and disease research.
  • 2010: The Legislature borrowed against future lottery revenue, eliminated allocations to the counties and essentially cut in half lottery allocations to both the transportation fund and the heritage funds, sweeping nearly an extra $30 million a year into the general fund.
  • 2015: The Legislature allocated $900,000 a year in lottery revenue to the Internet Crimes Against Children Enforcement Fund, $100,000 to the Victims’ Rights Enforcement Fund and up to $160,000 a year to the tribal college dual enrollment program.

Where the money really goes.

An Arizona Republic analysis of 35 years of Arizona Lottery revenue and disbursements found that about $1.8 billion in lottery revenue has gone to the specific programs voters and lawmakers designated.

Local transportation projects got $782 million; economic development efforts got $201 million; the Game and Fish Department Heritage Fund, which supports outdoor recreation and protects critical wildlife, got $384 million; health and welfare programs like teen-pregnancy prevention and food assistance for children and mothers got $219 million; the Court Appointed Special Advocates program for foster children got $39 million; homeless shelters got $8 million; a state program for problem gamblers got $3.6 million; and a program to help law-enforcement agencies fight internet crimes against children got $2 million.

“The dollars touch every corner of the state,” Edgar said. “My dream as director would be that every time someone puts down that dollar, they’ve got the thought that I’m having some fun playing a game but also having some impact in our community.” As annual lottery revenue has grown over the years, the money allocated to these programs has remained relatively stagnant due to limits the Legislature and voters set.

Transportation programs got less in 2015 than they did in 1982. Counties for years got $7.6 million a year, but since 2011 have gotten nothing. The Game and Fish Department Heritage Fund got $10 million in 2015, compared with the $20 million a year it got during the 1990s and 2000s. Programs for economic development, health and welfare, foster-care advocates, homeless and gambling addiction have remained stagnant for decades.  The real winner in Arizona’s lottery game has been the general fund

Who really controls the money?

The lottery, overseen by a five-member, governor-appointed commission and an executive director, controls the marketing. But it’s the Legislature that has taken control of where the revenue is allocated.

As lottery revenue has grown and disbursements to specific programs have shrunk or remained stagnant, the Legislature has directed more money into the state’s general fund, where it is impossible to track how specific dollars are spent. That revenue might have gone to schools and public-welfare programs as lawmakers promised and the Lottery markets on its website, or it might have gone to private prisons and lawmaker pensions.

The general fund over the past 35 years has received $1.7 billion.  In fiscal 2015, $72 million — 9.7 percent of the lottery’s $750 million in annual revenue — went directly to programs touted to voters. Another $103 million went into the general fund. That compares with 19 percent going to designated programs in both 2005 and 1995.  Before the recession, the general fund received about $30 million a year. Over the past several years, the annual allocation has topped $100 million. This year, that trend is expected to continue.

Creating open space no walk in the park

[Source: Jen Lebron Kuhney, Arizona Republic]- On a recent Saturday, more than two dozen children climbed up and over a piece of playground equipment at Surprise Community Park as parents stood shoulder to shoulder watching at the edge of the playground.

Across the street, dozens of families crowded under canopies, trying to claim scraps of shade, while nearby soccer players waited patiently for a turn to play on fully scheduled fields.

“It’s crazy how many people there are here,” said Surprise resident Eric Mitchell as he surveyed the park he frequents with his children, Connor, 8, and Emily, 5. “Surprise could use more spots like this.”

Packed parks are the norm in this once fast-growing West Valley community, which has only four city parks for its 117,000 residents. Similar problems plague several Valley cities, where a shortage of recreation facilities hurts residents’ quality of life and could hurt the cities’ economies.

Economic forces are partly to blame for the shortage. As the housing boom brought thousands of new residents to Valley communities, the recession that followed brought park creation to a standstill. With tax revenue taking a hit, parks and recreation departments tabled plans to build, expand and upgrade parks, pools and other facilities while they cut hours and staff.

But other factors have played a role as well. In some northwest Valley communities, which traditionally had more older residents and few parks, development brought young families clamoring for recreation facilities to the area. Older voters have been reluctant to pay for new parks.

Dale Larsen, a professor at Arizona State University’s College of Public Programs and former director of the Phoenix Parks and Recreation Department, said it’s not an issue successful cities can ignore. Parks are an integral part of what gives communities their character, he said.

“Public spaces in and of themselves are gathering places without regard to race, income, gender or ability,” he said. “They’re all-inclusive and absolutely vital.”

Need for parks

Now that the economy is improving, some cities are ramping up parks projects while others aren’t. Surprise and Mesa, for example, have hundreds of acres of parks on the drawing board, but it is unclear when funds will be available to build them.

There is no one-size-fits-all formula for how many parks or how much open space a city should have.

However, “intermediate-low-density” cities such as Phoenix, Mesa, Glendale and Chandler should set aside 8.1 percent of the total area of the city for parks and open space, according to the Trust for Public Land, a land-conservation non-profit.

The trust tracks parks and open space in 40 U.S. cities and ranks them based on park access, quality and size. Three Arizona cities are on the list: Phoenix, Tucson and Mesa, which rank 16th, 31st and 36th, respectively.

The trust gave Phoenix high marks because parks account for 13.7 percent of its area. Though the Trust for Public Land did not analyze Peoria, it has one of the highest ratios with 26.4 percent of its area devoted to parks and open space. The Peoria and Phoenix numbers, however, include massive regional parks, including Lake Pleasant and mountain preserves.

While not as important as how accessible parks are to people, park size is one factor that can show a city’s commitment to parks, said Peter Harnik, the director of the trust’s Center for City Park Excellence.

Generation gap

City officials throughout the Valley recognize the importance of parks and open spaces, but some cities, particularly in the West Valley, have struggled to meet that need.

Some cities, such as Surprise, had an older population that valued golf courses in their age-restricted communities over public parks and recreation centers. Older voters didn’t see a need for parks when their homeowners-association fees paid for pools, tennis courts and exercise facilities.

That changed in the housing boom of the 2000s, when developers started building homes on inexpensive land in the northwest Valley. Younger families moved into the new neighborhoods, which were less expensive than homes in other Phoenix-area cities.

But Surprise wasn’t prepared for its new, younger residents.

Surprise Community Park was built in 2003 and was the first large park of its kind in the city. Three other parks followed, but eight other large parks were planned but never built.

Now, the city needs 1,235 acres of park space if it wants to catch up with its 2008 parks plan.

The housing bust crippled tax revenue from developers and residents, which left Surprise and other Valley cities without money to catch up with demand for parks. Voters also have defeated bond proposals that could have paid for the upgrades.

Voters roundly rejected a Surprise bond proposal in 2009 that would have gone primarily toward transportation projects but included $6.7 million for parks and recreation improvements.

“When you don’t have funding, you can’t build even when the demand is there,” said Mark Coronado, Surprise’s community and parks director.

Coming up with money has been an issue for other northwest Valley cities as well.

Youngtown, which had age-restricted communities but now has a growing number of younger residents, has been hobbled by financial woes. It had such bad financial problems it considered disbanding as a town and being annexed by a neighboring city last year.

El Mirage had not invested heavily in parks because local leaders traditionally had declined to seek bond funding. But the city, now home to many new residents with young children, devoted $5.5 million of sales-tax revenue and voter-approved bond money for a recreation center with a swimming pool in last year’s budget.

Catching up

Other Valley cities are also taking steps to remedy their backlog of parks and recreation projects that went untouched during the downturn.

Mesa created a $793 million plan in 2002 to have an expansive park system with open spaces, swimming pools, playgrounds and fields by 2025, but the recession dried up revenue that would have paid for land purchases and maintenance of the planned parks.

Now, the city is beginning to upgrade existing parks after voters approved a $70 million bond in November.

But before building new parks, Mesa has to maintain current facilities, said Mark Heirshberg, director of the city’s parks and recreation department.

“We have to put in funding to take care of existing park systems and make repairs that we haven’t been able to make because of the recession,” he said.

Not all Valley cities put parks on hold during the downturn.

Peoria had bond money set aside to keep building parks, said Brenda Rehnke, the city’s recreation manager.

“It was good financial management,” Rehnke said. “Our mayor and council made it a priority.”

Four new parks were opened in Peoria in 2011 and 2012, with more facilities scheduled to get face-lifts in 2013.

Other cities, such as Chandler and Scottsdale, also had long-term park plans that allowed them to weather the recession, officials from those cities say. Additionally, both were not as hard-hit economically as others in the region.

An economic boost

Resuming park construction should be a priority, experts say, because it affects quality of life for residents and it can impact future economic development.

Harnik, of the Trust for Public Land, said cities are starting to see the value of parks and recreation centers beyond places for children to play. Recreation centers and other youth facilities can also be a boon for a city’s coffers.

“I think we’re in a golden age of urban parks,” Harnik said. “There are places that are going gangbusters on their park-building.”

One major recreation facility that has demonstrated its ability to bring in tourism is the Reach 11 Sports Complex in Phoenix.

The 5-year-old facility has 18 lighted soccer fields and is one of the largest soccer complexes in the western United States.

Tourists and groups attending tournaments at the complex generated $120 million in sales and $2.9 million in tax revenue in 2010, according to a Phoenix 2010 staff report.

Aside from being a draw for tourists, park spaces can help families determine where they want to settle down.

Larsen, the ASU professor, said asking if parks draw in residents to a new city or if an increase in residents requires cities to build more parks is like trying to determine if the chicken or the egg came first.

However, he added that well-maintained parks can improve property values.

“We’re at a point where officials are making parks more of a priority,” he said. “Once they realize parks are safe, structured areas for people to gather, they understand it’s a huge asset for a community.”



Push to protect Arizona’s parks from budget cuts gains steam

[Source: Shaun McKinnon, AZ Republic, Page 1] –  Arizonans overwhelmingly support state parks and open spaces and believe such areas contribute to a region’s economic health, but few people understand how the state pays for its parks, a new survey says. That lack of knowledge could imperil a parks system already weakened by budget cuts if lawmakers don’t hear from enough voters who want open spaces protected, according to Arizona Forward, a newly organized group that commissioned the survey.

“Nothing is stronger than grass roots, with people calling their elected officials saying, ‘This is important to me, I want my parks to be open,’ ” said Diane Brossart, acting director of the group. “But I think we take these things for granted, and until there’s a crisis, people are not engaged with the issues.” [to read the full article click here].

Beaudry RV Co. concerned with Arizona’s decision to close state parks

Arizona’s decision to close half their state parks has Beaudry RV Company concerned for RVers as well as the state.  RVers flock to Arizona during the winter months and bring millions of dollars in tourism to the state.  Having parks like Red Rock State Park in Sedona close will be a huge loss as a destination for RVers as well as Arizona.

Last year California’s proposal to close state parks resulted in a strong outcry from park advocates, forcing Governor Schwarzenegger to come up with an alternate solution to fund parks. Other states such as Iowa, Lousiana and Idaho may close all or part of their state parks.

The Arizona State Parks lost over two thirds of its $26 million budget in the last fiscal year. 8 parks have been closed, 13 more by June of this year.  This leaves only 9 parks open with no guarantees.  “Many local towns depend on tourism revenue that the parks create, closures could be disastrous for these communities,” says Thom Sylvester at Beaudry RV Company.  “This raises some red flags.  We strongly encourage those who enjoy our great state to write local representatives in opposition of the closures.  It is a great loss to our state.”