- Associated Press - Thursday, April 14, 2016

RALEIGH, N.C. (AP) - The General Assembly appears poised for another debate about increasing how much the North Carolina Education Lottery can spend on advertising.

A lottery oversight committee recommended legislation Thursday that can be considered in the session starting April 25. It would double the limit the lottery can spend on ad expenses from 1 percent of total annual revenues to 2 percent. For example, with the lottery aiming to sell $2.04 billion in tickets for the year ending June 30, the advertising cap would go from $20.4 million to $40.8 million.

The extra advertising money would help attract new sales, generating an estimated $48.4 million toward public education in the upcoming fiscal year and $56 million for the next, according to lottery Executive Director Alice Garland.

“We will absolutely be able to use that money,” Garland said after the committee meeting. “It will allow us to do a lot of things that we’d like to be able to do and have not.”

Either the House or Senate has sought lottery advertising increases in their budget proposals since 2014, but they’ve been unable to agree on details. The Senate sought last year to raise the cap to 1.5 percent. The year before, the House spending plan sought a 2 percent cap but insisted any increase come with advertising content limits and restrictions beyond the tight rules in place since the lottery’s inception in 2005.

Rep. Nelson Dollar, R-Wake and the chief House budget-writer, has kept that viewpoint, casting what sounded like the committee’s only no vote, primarily because of the increased advertising.

“By going from 1 to 2 percent, that is a significant increase in advertising out there,” Dollar said in committee. “A number of us have felt for some that we needed greater disclosure with what you are actually buying when you purchase a ticket.”

The lottery, which began selling tickets 10 years ago last month, has seen sales and net profits grow every year since, reaching $522 million for education a year ago, but there’s no guarantee that will continue.

Garland said the expense increase could expand digital and online advertising. The lottery also would like to run more short radio ads letting people know about jackpot amounts in the multistate Powerball and Mega Millions games.

Sen. Harry Brown, R-Onslow, an oversight committee member and a Senate budget-writer, said he’s not sure whether agreement can be reached on raising the advertising limit before the session ends, likely in the early summer.

The report recommends that additional lottery profits from the advertising increase help with targeted pay raises for teachers in hard-to-staff schools and subjects. Brown, however, would like to see a portion of lottery funds benefit rural school construction. Seventeen percent of net lottery proceeds are now distributed to school construction statewide.

“Everybody’s got ideas how to spend it and that’ll be part of the debate, and that’s when it will get more difficult,” Brown said.

The proposed legislation, which would need to pass the full House and Senate before going to Gov. Pat McCrory’s desk, also would revert all unclaimed prize money to education. Right now, the lottery can use half of the amount to enhance cash prizes for other games. And the legislation would make clear the lottery would need General Assembly approval to offer games on video terminals.

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