Kindergarten & Keno: How it works

Towns across New Hampshire are considering whether to authorize the online lottery game Keno, which was passed in 2017 to offset the costs of paying for full-day kindergarten. We’ve heard a lot of questions around how the game can pay for kindergarten, how much funding it provides, and more.

Here’s what you need to know:

  • Eighty-five percent of New Hampshire’s kindergartners attend a full-day program
  • The state pays for half-day kindergarten and provides an additional grant for districts that offer full-time programs
  • The online lottery game Keno was legalized in 2017 as a way to pay for the full-day kindergarten grants
  • Each town has to vote to approve Keno in its restaurants, bars, and establishments
  • In Fiscal Year 2018, Keno generated $8.3 million in revenue and provided about $1.5 million for Kindergarten after prizes and expenses, while the total cost of full-day kindergarten grants (the $1,100 per full- day student) were roughly $11 million
  • Last year, 12 districts and 3 charter schools began providing full-day programs for their students
  • There are two proposals in 2019 that would fund full-day kindergarten without relying on Keno

How do we currently fund kindergarten?

The state pays districts $3,708 per student in grades 1 through 12. This is called “base adequacy.” This money comes from the Education Trust Fund, which is the state’s bank account for education and is funded by business taxes, lottery revenues, and other sources.

However, the state only pays half of that amount for kindergarten students from the Education Trust Fund, or $1,854 per student. The rationale behind counting kindergarten students as half-time is that New Hampshire only requires districts to offer half-day programs, so anything beyond that is a local decision.

Beginning in 2017, the state added a new grant program that provides a guaranteed $1,100 per kindergarten student to all districts that offer full-day programs. The grant money first comes from Keno revenues, and any remainder comes out of the [simple_tooltip content=’the state’s bank account to pay for public schools’]education trust fund[/simple_tooltip].

If Keno fully funds the $1,100 per student grant and there is more money to spare, the additional funds are added to the $1,100 (up to $754). The total grant cannot exceed $1,854, meaning that regardless of how much money Keno generates, a district cannot receive more than $3,708 per kindergarten student (the base adequacy amount that they receive for all other students).

The additional Keno funding is a grant program, meaning this or future legislatures can repeal it without affecting the education funding formula.

Is kindergarten required by law?

School districts are required to offer half-day kindergarten programs, but students are not required to attend (known as “non-compulsory”). According to state law, districts do not have to provide transportation or buses for kindergarten children.

However, 85% of the state’s kindergartners attend full-day programs.

In 2017, twelve districts and three charter schools began offering full-day kindergarten, including Concord, Dunbarton, Exeter, Litchfield, Merrimack, and Milford. Chester, Epsom, and Weare are three towns that will vote on whether to offer full-day programs to their students at their Town Meetings this March.

What is Keno?

Sixty-six towns offer Keno, and an additional 26 towns are set to vote on it at their Town Meetings this spring. Portsmouth and Concord have voted against offering it in their cities, and the Exeter Select Board voted not to put it on the ballot. Conway defeated it last year, though it is up for a vote again this March.

Establishments that offer Keno must have a license to serve alcohol.

According to the New Hampshire Lottery Commission, the draw-based game plays every five minutes with wagers ranging from $1 to $25. Players can buy a card and see the numbers on a television screen in the room.

Retailers earn 8% commission on sales, approximately 72% goes into prize payouts, 1% is transferred to the New Hampshire Department of Health and Human Services for problem gambling programs, 2% covers administrative costs, and the remaining 17% is transferred to the Education Trust Fund.

Has Keno covered the whole cost of Kindergarten grants?

In short, no. Last year, Keno generated $8.3 million in new revenue, but only about $1.5 million went to pay for kindergarten. The rest of the revenue was spent on prizes, administrative costs, and other expenses. The total cost of the grants this year was about $11 million, meaning that the state’s Education Trust Fund had to provide the remaining $9.5 million. (The Education Trust Fund is largely funded by business taxes, tobacco taxes, and other taxes.)

This year, Keno is projected to generate $15 million, according to the lottery commission. That means that Keno would provide $2.3 million for kindergarten grants next year, but the state is expected to need at least $11 million next year to pay for the kindergarten grants.

It is important to note that towns don’t have to authorize Keno in order to receive the full-day kindergarten grants.

What are the upcoming proposals?

  • HB 184 would provide the full adequacy payment for kindergarten students, providing districts the same $3,708 per student as other grades. It would remove the grant program, and treat Keno revenues like other lottery revenues (which go into the Education Trust Fund to pay for adequacy grants). The House passed the bill on February 27, and it now heads to the House Finance Committee.
  • SB 266 would provide the full adequacy payment for kindergarten students, providing districts the same $3,708 per student as other grades. It would change the law so that instead of kindergarten grants, Keno revenues would fund the school building aid fund. (which go into the Education Trust Fund to pay for adequacy grants). The Senate Education & Workforce Development Committee recommended passing the bill, and it heads to the full Senate for a vote on March 14.

Want to learn more? Reaching Higher NH has a five part series unpacking important elements of the education funding formula so that more Granite Staters can join the conversation and make informed decisions on what it all means for our children, classrooms, and communities! Check them out: