Where does all that Hoosier Lottery money go? Why it doesn't fix Indiana's road problems

Lottery confirms first winning Powerball drawing
Posted at 2:11 PM, May 31, 2019
and last updated 2019-05-31 14:12:05-04

INDIANAPOLIS — So much attention in Indiana is being focused on the roads. Between potholes in the cities and towns, and construction on the interstates, it’s hard to look around without seeing an orange cone.

With road problems on so many people’s minds, RTV6 has received a few questions about the money from the Hoosier Lottery, and why it doesn’t go toward fixing the roads.

The answer is a lot more complicated than one might think, which is the norm when dealing with state budgets.

As an example, here’s how Hoosier Lottery money was distributed in fiscal year 2018:

After paying out lottery winners, payments to retailers and operating expenses, $30 million went to the Police & Firefighters’ Pensions, $30 million went to the Teachers’ Retirement Fund and the rest (about $250 million) went to the Build Indiana Fund.

What happens to money in the Build Indiana Fund?

Most of the money is used for the Motor Vehicle Excise Tax Replacement Account. That account is used to replace funding lost when state lawmakers cut the excise tax by about half in the late 1990s. It was called the “biggest tax cut in state history.”

In fiscal year 2018, about $236 million went to that account.

Once it’s in that account, it gets returned to the county that would’ve received money on excise taxes. Each county can use that money how it sees fit, including on roads.

Marion County received a total of $38,123,489 from the Build Indiana Fund in fiscal year 2018, most of it in excise tax reduction.

The rest of the money in the Build Indiana Fund goes toward other miscellaneous projects, such as education developments, funding technology upgrades in schools and libraries and airport developments.

It’s unclear if the plans for the money has changed since the Hoosier Lottery’s creation in the late 1980s. But about 75% of the money from the lottery goes to replacing lost money from a 1990s-era Indiana tax cut.