New York schools received 0 million less in state lottery revenues over the past seven years to bail out the New York Racing Association, a state audit shows.
State lawmakers seven years ago allowed the racing association to use state lottery funds to fend off creditors while working to regain solvency. The amount used over the years tops $200 million, which is equal to only a small percentage of the state’s annual education budget, an audit by the New York State Comptroller shows.
Although it’s just a tiny portion of what the state spends, it could have been used to provide additional educational resources for teachers and their students, a New York teachers union representative told BuzzFeed News.
The state allocated the funds at the same time New York’s public schools lost 22,000 teachers and 8,000 support staff, with poorer school districts often suffering more than wealthier ones, teachers union officials say.
Although educators would have preferred the money stayed in education, a racing association spokesperson said it served a good purpose.
“New management, in place since 2013, began a process which successfully culminated in an operating profit of $1.5 million, the first in 13 years,” racing association spokesman John Durso Jr. told BuzzFeed News. “That’s a result of hard choices, running the organization like a business, and continuing to focus on the interest of our fans.”
The racing association underwent Chapter 11 bankruptcy reorganization in 2008 after emerging from an investigation that showed it owed the IRS millions of dollars in taxes from racing revenues.
The racing association threatened to close the three tracks it runs as well as the Belmont Stakes, and state officials allowed it to cede its ownership of three racetracks in exchange for a $105 million loan, a 25-year franchise, $200 million in debt forgiveness, and the ability to divert lottery funds.
