McGeorge School of Law

Proposition 20

Proposition 20:
California State Lottery.
Allocation for Instructional Materials

By Geraldine Diaz

Copyright © 2000 by University of the McGeorge School of Law

JD, McGeorge School of Law, University of the Pacific
to be conferred 2001
B.A., Biology & Political Science, University of San Francisco, 1997

Table of Contents

Executive Summary


Drafting Issues

Policy Questions




Executive Summary

The California State Lottery Act of 1984 regulates the amount of lottery funds reserved for public education. Under the provisions of the Act, 34% of the total annual revenues from the sale of state lottery tickets are reserved for public education. These funds must be used exclusively for the education of pupils and students, and none of these funds may be spent for acquisition of real property, construction of facilities, financing of research, or any other noninstructional purpose.

Proposition 20 will change the way lottery funds are put to use by exclusively allocating to "instructional materials" 50% of any increase in the share of the money calculated to benefit public education over the amount calculated in the 1997-1998 fiscal year. This would guarantee a minimum level of funding for the purchase of textbooks and other instructional materials.



A. Current Law Existing California textbook-funding statutes

1. Existing statutes already provide a number of special sources or programs for funding instructional materials, including the following:

a. Public Textbook and Instructional Materials Incentive Program

Beginning with the 1999-2000 fiscal year, the Public Textbook and Instructional Materials Incentive Program (see Cal. Educ. Code § 60119) enables the governing board of a school district to hold hearings to determine the textbook and instructional material needs of pupils in public schools. Once a need is determined the board may use money from specified funds to fill the textbook and instructional material gaps of students in the board’s school district. (Cal. Educ. Code § 60119(a)(2)(A) & (B).) The particular funds the board can draw from include: (1) Any funds available from "categorical programs" for textbooks or instructional materials "including any funds allocated to school districts that have been appropriated in the annual Budget Act;" (2) Money left over from the previous year that was allocated for the purchase of textbooks or instructional materials; and (3) "Any other funds available to the school district for textbooks or instructional materials." (Cal. Educ. Code § 60119(a)(2)(B) (West 2000).)

b. State Instructional Materials Fund

The State Instructional Materials Fund (Cal. Educ. Code § 60240) is designed to "be a means of annually funding the acquisition of instructional materials as required by the Constitution of the State of California." (Cal. Educ. Code § 60240(a) (West 2000).) The fund will be "continuously appropriated" to the Department of Education in California to enable it to disperse funds for instructional materials. (Id.)

c. Schiff-Bustamante Standards-Based Instructional Materials Program

This program is designed to enable school districts to make sure students from kindergarten through grade twelve are "provided with instructional materials in the core curriculum areas of language arts, mathematics, history/social science, and science." (Cal Educ. Code § 60450 (West 2000).) The Legislature further defines its intent for this program to be a "supplement" for other sources already providing funds for instructional materials. (Id.)

2. California State Lottery Act

The California State Lottery Act was created by an initiative measure approved by voters during the November election of 1984. The Lottery Act created the California State Lottery. The purpose of the Lottery Act was and is to provide "support for preservation of the rights, liberties and welfare of the people by providing additional monies to benefit education without the imposition of additional or increased taxes." (Cal. Gov’t Code § 8880.1 (West 2000).)

The Act was designed to provide extra funding to supplement money already allocated to public education. The Act states, "The People of the State of California further declare that it is their intent that the net revenues of the California State Lottery shall not be used as substitute funds but rather shall supplement the total amount of money allocated for public education in California." (Cal. Gov’t Code § 8880.1 (emphasis added).)

The Lottery Act outlines how money from the state lottery should be distributed. Government Code Section 8880.4 outlines allocation requirements for lottery revenues. Some key provisions include:

50% of the annual net revenues from the sale of lottery tickets is to be returned to the public in the form of prize money.
At least 34% is to be reserved for public education as specified in Section 8880.5.
All interest earned by funds held in the State Lottery Funds is reserved for public education and should be considered as monies not included within the above mentioned 34%.
No more than 16% is reserved for the payment of Lottery administrative costs. If lottery expenses are determined to be less than 16% of the total annual revenues, any surplus funds will be redirected to public education.
(Cal. Gov’t Code § 8880.4 (West 1995).)

Section 8880.5 created the California State Lottery Education Fund and provides that all lottery revenue payments be made directly to public school districts and to other California educational institutions. This section further defines the educational purpose for which lottery funds may be used. As a result, all lottery funds "shall be used exclusively for the education of pupils and students and no funds shall be spent for acquisition of real property, construction of facilities, financing of research, or any other non-instructional purpose." (Cal. Gov’t Code § 8880.5(n) (West 2000).)

The Lottery Act declares that "all matters related to the operation of the Lottery. . . be governed solely pursuant to this Chapter and be free from regulation or legislation of local governments, including a city, city and county, or county." (Cal. Gov’t Code § 8880.69 (West 1984.) However, what school districts, county offices of education, and community college districts do with the lottery money they receive pursuant to Section 8880.5, "shall not be subject to state control." (Cal. Educ. Code § 14600 (West 2000).)

B. Proposed Changes

Proposition 20 is a legislative initiative amendment. Passed by the Legislature as Assembly Bill 1453 and approved by the Governor, Proposition 20 is being submitted to the voters because it amends a law that was enacted by initiative.

If passed by voters, Proposition 20 will amend one section of the California Government Code that outlines how revenues from the state lottery shall be allocated. (See Gov’t Code § 8880.4(a)(2).) Proposition 20 will have no effect on the total amount of annual revenues currently allocated to public education (which is set at 34%). Proposition 20 will add the following language to Government Code Section 8880.4(a)(2):

[F]or the 1998-99 fiscal year and each fiscal year thereafter, 50 percent of any increase in the amount calculated pursuant to this paragraph from the amount calculated in the 1997-98 fiscal year shall be allocated to school districts and community college districts for the purchase of instructional materials, on the basis of an equal amount per unit of average daily attendance, as defined by law, and through a fair and equitable distribution system across grade levels.

(California State Lottery. Allocation for Instructional Materials Initiative, California Voter Pamphlet, p. 118 (2000).)

Proposition 20 will take 50% of any increase in funds allocated to public schools, beyond the 34% amount already allocated to education in the 1997-98 fiscal year, and use it exclusively to purchase instructional materials. Under Proposition 20, fiscal year 1997-1998 is the designated base year to determine the amount of funds to be set aside for instructional materials in subsequent years.

For example, in fiscal year 1997-98, $820 million (34% of the total State Lottery annual revenues) were allocated to public schools. (California State Lottery. Allocation for Instructional Materials Initiative, AB 1453, Appropriations Committee Fiscal Summary, p. 1 (Aug. 19, 1998) (consultant Maureen Brooks).) In fiscal year 1999-2000, it is projected that $980 million will be appropriated to public schools. (Id.) This is an increase of $160 million from the 1997-98 base year. Under current law, this entire $980 million would be allocated to the schools for any school expense, except for buying property, constructing facilities, and financing research. However, Proposition 20 would require that $80 million of that $980 million be spent exclusively on textbooks. Under proposition 20, less than 10% of what used to be almost entirely discretionary funding would be restricted to instructional materials.

Drafting Issues

Proposition 20 does not define key terms with precision. Although the Proposition designates a certain amount of funds exclusively for "instructional materials," it does not specifically define what constitutes an "instructional material". If not clearly defined, school officials will have the discretion to use these funds to purchase other materials that may not have been intended by the drafters of Proposition 20 as an "instructional material." According to the California Education Code "Instructional Materials" are defined as: "[A]ll materials that are designed for use by pupils and their teachers as a learning resource and help pupils to acquire facts, skills, or opinions or to develop cognitive processes. Instructional materials may be printed or nonprinted, and may include textbooks, technology-based materials, other educational materials, and tests." (Cal. Educ. Code § 60010 (West 2000) (emphasis added).)

Proposition 20 is to be known and referred to as the "Cardenas Textbook Act of 2000." (Voter Pamphlet, at 118.) The primary focus is apparently upon textbook purchases (Voter Pamphlet, at 42, Argument in Favor of Proposition 20). If Proposition 20’s drafters designed it to ensure allocation of additional monies for textbooks specifically, their use of "instructional materials" within the proposed amendment may not serve that purpose. If school districts interpret the "instructional material" language according to the Education Code definition, that extra money could be used for anything from maps to computers. The Proposition 20 drafters might have specifically stated that the money is to be used for textbooks or they could have limited the scope of "instructional materials" by some other means to ensure that money would go towards the purchase of textbooks. In light of the references to "textbooks and other instructional materials" in the Argument in Favor of Proposition 20 (Voter Pamphlet, at 42), a court is likely to interpret the phrase "instructional material" broadly.

Additionally, Proposition 20 will not change the method used to allocate funds to schools based on enrollment numbers. Proposition 20 addresses a "textbook crisis," yet it does not specifically address how to get textbooks to the schools that have the greatest shortfall. Proposition 20 may not go far enough in requiring only about 10% of lottery monies already going to schools be spent on textbooks. Proposition 20 proposes no changes to ensure that those schools with the most acute shortage of texts have their needs met.

Policy Questions

The purpose of the California State Lottery Act of 1984 was to supplement the funds already appropriated for public education by other sources. (See Cal. Gov’t Code § 8880.1.) Proposition 20, however, may not effectively alleviate the textbook crisis existing in schools today. By restricting even a small portion of the lottery funds for the specific purchase of instructional materials, Proposition 20 limits the amount of money that may be used to finance other equally important and necessary educational expenses, such as teacher salaries and school facility upgrades. Taking money away from one educational expense to pay for another does not solve California’s educational finance problems. As a result, Proposition 20 may only result in a short-term solution to the textbook crisis.

Proposition 20 takes local control away from the school boards by taking away their power to determine how lottery funds should be spent and giving it to the State government. One downside to State control is that it may lead to burdensome record keeping and reporting requirements, all of which may result in wasted time and money. Consequently, the struggle to determine whether local control or state control should prevail mostly affects the students.

Interestingly, those in opposition to Proposition 20 include members of the California Teachers Association, the Association of California School Administrators, and the California School Boards Association. Those in support of the Proposition are primarily Assembly Members and Legislators.


Students in California’s public schools are in need of textbooks. Proposition 20 aims to supply the additional funds to fill this need by adding an amendment to the California State Lottery Act. Although its intentions are good, it is questionable whether Proposition 20 will adequately alleviate the textbook problem. The Lottery Act declares that all matters dealing with the operation of the Lottery are to be governed by the state but spending of money received by school districts is to be under local control. (Cal. Gov’t Code § 8880.69.) The issue of local control versus state control over the use of these funds could lead to either the continuation of a decentralized school system or to the beginning of a newly centralized system. Furthermore, the failure by Proposition 20’s drafters to adequately define and limit the scope of "instructional materials" may defeat their goal of ensuring a stable flow of funding specifically for textbooks.