N.Y. man's lottery fortune hurts home town state aid

Jul 18, 2017, 10:45 am (12 comments)

New York Lottery

PORT BYRON, N.Y. — Good fortune smiled on Richard Loveless in 2015, when the retired electrician won a $42.5 million lottery prize, but those winnings are bringing headaches to the Port Byron School District.

Loveless' winnings pushed up the school district's total wealth, as calculated by the state's school aid formulas. It bumped Port Byron from being one of New York's poorest school districts to one that's almost middle class, said Neil O'Brien, Port Byron's superintendent.

"I'm thrilled he won. I play the lottery and dream of winning," O'Brien said. "I don't want to take the luster off his winning."

But, if the state doesn't take action, Port Byron will take a one-time loss of state aid that O'Brien estimates is about $452,831. That's about 3 percent of the $13.3 million in aid the district currently receives, according to district figures. Port Byron's budget for 2017-2018 is $21.2 million.

The loss of state aid won't occur until the 2018-2019 school year.

The state Division of Budget disagrees how big the hit will be for the district. The state believes Port Byron's calculations are "many times higher" than what the the impact will be, said Morris Peters, speaking for the division.

"This issue is of an order of magnitude that can be addressed as part of next year's budget process," he said. The district's aid for 2018-2019 hasn't been calculated yet, he said.

This isn't the first time such a lottery windfall has affected a small, poor school district.

In 2012, a resident of the Green Island Union Free School District in the Capital District hit the Mega Millions for $28.7 million, which threatened to lower the state aid to the little one-building school district.

In the past, the state has written special language into budget legislation to ease the aid hit for districts that are home to big lottery winners. Instead, O'Brien wants the state to craft a policy that exempts lottery winnings above $1 million from being used to calculate a school district's wealth.

New York calculates state school aid based on the total value of taxable property in a district, as well as the total gross income earned by the residents. So, when one resident in a poorer, small district wins big in the lottery, it can make a big difference in the wealth calculations. It looks like everyone in town has gotten a big raise.

"It's unfortunate that one person's gain, comes at the cost to all the school children in the district," said Michael J. Borges, executive director of the New York State Association of School Business Officials.

Loveless, a retired electrician from Port Byron, won the $42.5 million Lotto prize in November 2015. Loveless chose to take his winnings in a lump sum payment of $29,552,283, according to the state Gaming Commission. After required withholding, his net check was $19,557,701.

For one year, the district's total gross income skyrocketed due Loveless' win, O'Brien said.

"It made the district go from poor to middle class, almost," he said.

Port Byron is a rural school district. People live in modest homes and on family farms. There are no lake front homes, like those along Skaneateles Lake, housing developments or factories that would generate big property taxes.

The state aid formula has a three-year lag. That means the Loveless' lottery win will impact the district's state aid in 2018-2019, said the New York State Department of Education. Mitigating the impact of the change in wealth would require a legislative solution, the department said in an email.

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Syracuse

Comments

Raven62's avatarRaven62

Without a Doubt: Taxation is Complicated!

music*'s avatarmusic*

I have seen Richard Loveless on a You Tube video. He is a proud Union electrician. His close friends were there when Yolanda Vega, New York lottery representative, presented the oversized and fake check to him.

US Flag

noise-gate

Someone is going to have to " suck it up." You can't avoid breaking some eggs if you going to make an omelette. It's a <snip> if you do, <snip> if you don't situation.Oh well..

This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

Toronto

Sounds like sour grapes from the people that didn't win. Hope he drives his hummer around in circles while the school kids, in their tattered clothes carrying falling apart textbooks from the 1980s, watch during recess.

justAndy1970

What more does NY want? They took him for $10 million in tax deductions on his winnings. They can't use that tax, oh yeah we are talking about NY here.

zephbe's avatarzephbe

Seems like a problem NY hasn't addressed since 2012.  Why not treat the lottery win as an outlier and not use it in averaging income? Winning isn't the problem. Accounting for the win is the problem.

Soledad

Quote: Originally posted by Toronto on Jul 18, 2017

Sounds like sour grapes from the people that didn't win. Hope he drives his hummer around in circles while the school kids, in their tattered clothes carrying falling apart textbooks from the 1980s, watch during recess.

That's a weird thing to say. Gloating or taunting is not flattering behavior. Me? I'd donate the money , the 300,000 whatever, to the school district, and then move. Plain and simple. But I've always moved a lot.

noise-gate

Quote: Originally posted by Soledad on Jul 18, 2017

That's a weird thing to say. Gloating or taunting is not flattering behavior. Me? I'd donate the money , the 300,000 whatever, to the school district, and then move. Plain and simple. But I've always moved a lot.

.. have you left money behind to the unfortunate few in your districts, after each of your past moves? Do tell! 

Soledad

No silly of course not, but sometimes I use whatever mine I get to help someone. Powerball or Moneyball whatever,, at that point it wouldn't matter to me. Honestly it wouldn't. I'd be boasting not gloating. It's just paper in my eyes. You paint with paper, get my drift.

Bleudog101

Had to read the article twice in disbelief.  So one man's fortune and punish the whole town?  Maybe New York could do what Massachusetts does and split it amongst all the towns and cities there.   One town not too far from where I grew up doesn't have a lottery terminal so of course folks cried fowl on that one.

Cassie8620's avatarCassie8620

IKR(i know right) Just Andy 1970 

Exactly... I know right. geez.

HaveABall's avatarHaveABall

Hum ... Richard has to move to a wealthier place this year to enjoy the winner's floating experience fully!  I hope his neighbors aren't sending vibes his way causing him to feel loved-less.  Shucks! Confused

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