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Morgan Allen, (503) 947-5920

August 18, 2009

Superintendent Castillo Urges for More Lottery Profits for Schools

SALEM – Today Superintendent of Public Instruction Susan Castillo provided testimony before the Oregon Lottery Commission in favor of changing video lottery retailer commission rates and directing more lottery profits to help fund Oregon public schools.

Here is an excerpt of her testimony:

“I’d like to share some of the reasons why I support changing the video lottery retailer commission rate to 15%.

"The first reason is that there have been numerous studies that have shown that reducing Oregon’s commission rate to 15% still delivers a healthy profit for video lottery retailers and allows them to cover their costs. Despite significant opposition to adjusting rates in 2005, including overwhelming testimony that restaurants and bars across Oregon would be forced to close, the studies commissioned over the last decade and a half have proven to be true. The Oregonian newspaper reports that “although some retailers threatened to dump their machines because of the rate cuts…the number of retailers is up…after the new contract was signed in 2005.”

"In fact, not only has the number of retailers gone up, but the Oregon Lottery has played a significant role in this increase by providing free materials, free training, and dedicated staff to help retailers maximize profits. I believe that there are almost 20 staff designated to helping, as materials on the Oregon Lottery website say, “Make the Most of Your Video Lottery Business!” I can assure you that I don’t have 20 staff at the Oregon Department of Education who are dedicated to helping our school districts “Make the Most of Your Reading Literacy Program!”

"The second reason is what the State of Oregon could do, specifically in the field of public education, with additional resources from lottery profits. My understanding is that the current retailer commission is about 23% and that every percentage point represents about $7 million dollars. So during the just completed biennium our state gave away $56 million dollars that could have been used to stave off some of the most draconian budget cuts.

"That $56 million dollars could have provided full day kindergarten for almost 40,000 kindergarten students last school year. Or it could have been used to hire up to 1000 teachers in school districts across Oregon who are struggling to keep their school doors open without laying off staff. That $56 million dollars could have ensured that every child in Oregon eligible for Head Start was able to enroll in a program last year. It could have also funded a Farm to School nutrition initiative for over 4 years.

"When you couple our current economic crisis and cuts to vital public services like education, health care, and public safety with the overwhelming economic evidence that retailers will still earn a healthy profit if compensation rates are reduced to 15%, it seems very clear to me that this change strikes a fair balance. The lottery retailers will continue to receive a healthy return and our schools will have more resources to invest in our students. We owe it to the children of Oregon -- and to the taxpayers -- to move forward with a reasonable change to the commission rate.

"I’d like to close by reminding everyone in attendance here today that when the Legislature authorized the expansion of the Oregon State Lottery 17 years ago to include video gambling it also put this Commission in charge of setting retailer commission rates for the restaurants and taverns that provide space for the machines. Your responsibility is to maximize lottery profit and provide a fair rate of return to retailers. By adjusting the commission rate to 15% you will be fulfilling both of these mandates and maximizing the amount our funds used for the Lottery’s intended purpose of supporting public education in Oregon. “

Click here for a copy of Superintendent Castillo’s full testimony.

Susan Castillo, State Superintendent of Public Instruction
Jake Weigler, Communications Director, Telephone (503) 947-5650

Oregon Department of Education News Releases contain information that was originally released to the press as an official release.  Refer to each News Release for the details.

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