State-run raffle could be new way to fund schools

Sen. Click Bishop, R-Fairbanks, speaks in the Alaska Senate on April 15. Bishop sponsored legislation to fund public schools using a statewide raffle. (Photo by Skip Gray/360 North)

Alaskans could have a new choice for what to do with their permanent fund dividends next year – a raffle that would fund public schools. Lawmakers passed House Bill 213, a measure that would start a raffle that could pay a top prize as high as $24 million in the future.

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At a time when Alaska lawmakers have struggled to close the gap between how much the state spends and what it brings in, finding new funding for public schools has been hard.

Fairbanks Republican Sen. Click Bishop said he heard a wish during public testimony on the budget, year after year.

“ ‘I wish I had a way to donate my permanent fund to… the general fund, or education,’” Bishop said. “And now you’ve got a vehicle to do that.”

Bishop combined the idea of donating money with a strategy other states use to fund schools: a lottery.

“I think there’s 15 other states that have year-round education lotteries,” Bishop said. “And this is just an old-fashioned bucket raffle.”

Here’s how it would work: each Alaskan adult would be able to donate $100 increments to the raffle, when they apply for their PFD. Each $100 would count as one raffle entry. And once per year, four winners would be drawn. Kids couldn’t participate.

This cartoon depicts how the donations from PFDs would be divided under the recently passed bill. The cartoon is by John Manley, who has worked as an aide to Sen. Click Bishop (R-Fairbanks). Bishop is depicted in the upper left corner. (Screenshot from the Alaska Legislature site)

Each $100 would be split three ways. Half would go directly toward schools. A quarter of the donation would go to the raffle fund. And a quarter would be used to start a new state education endowment. Once that endowment fund hits $1 billion, it would pay out money each year to schools.

Of the raffle fund, 8 percent would go to the top prize, with smaller amounts going to three others.

The idea of donating money through the PFD may sound familiar. It’s the same method as Pick.Click.Give. That’s the program that allows Alaskans to donate to designated nonprofits.

And the bill has raised concern among Pick.Click.Give. supporters. Anchorage independent Rep. Jason Grenn is the former manager for Pick.Click.Give. Grenn noted that donations have dropped due to the recession. And he sees the education raffle further squeezing the nonprofits.

“I fear that a program that has been innovative and has raised tens of millions of dollars for hundreds of nonprofits across our state will start to see the deterioration even further,” Grenn said.

No one knows how much Alaskans would give to the program. Bishop used $60 million a year as a long-term target. That’s 600,000 of those $100 entries — an average of more than one per Alaskan adult. Pick.Click.Give. gets $2.5 million in total donations per year.

But it’s much less than the $350 million Alaskans currently spend on various forms of legal gaming, from pull tabs to bingo.

Fairbanks Democratic Rep. David Guttenberg voted against the raffle.

“This is a gaming bill disguised as educational funding,” Guttenberg said. “That’s all it is.”

Guttenberg said lower-income residents could be hurt.

“We fight amongst ourselves on how much we’re going to give in the permanent fund (dividends), because we want to give the people as much as we could possibly give, and now we’re put a temptation in front of them to gamble it away,” Guttenberg said.

But others said that it’s unfair to see the bill as primarily a form of gambling. That’s because most of the donations will go to fund schools, and only a small share will go to raffle winnings.

Bishop noted that gambling already exists in the state.

“Well, if we were so concerned about gambling away our permanent fund, then how come there hasn’t been a hue and cry to repeal the 18 different types of gaming that’s in Alaska now that you can play year-round, that does not benefit education,” Bishop said. “This bill benefits the children.”

It could take decades for the raffle fund to reach its maximum size under the bill of $300 million. Once it reaches that point, more of the donations would be directed to the new education endowment.

Bishop is hopeful about the bill. And even in the worst case, he said the state won’t be worse off.

“The proof’s in the pudding,” Bishop said. “It might be a total flop, but you know what? We were trying something.”

Bishop said he plans to put at least $100 of his dividend into the raffle each year. But he has a higher priority for his PFD – saving for college for his four grandchildren.

The Legislature hasn’t officially transmitted the bill to Gov. Bill Walker yet.