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recurring capital. She thinks that this is important to discuss, that for the last two fiscal years, the County has funded two cents for school recurring projects. There is another penny yet to be met for the school recurring projects and another penny far the County recurring projects. In 2005, when the County Commissioners were trying to update the capital funding policy and going through all of the options for funding, the General Assembly had not authorized the lottery, so the policy does not include any proceeds. Very soon after the capital funding policy was adopted, the lottery was signed into law. In October 2006, the State made its first distribution of lottery proceeds to the counties. It distributed $38 million to all 115 school districts. Of that amount, OCS received about $231,000 and CHCCS received about $378,000. This is an target with what was budgeted for lottery proceeds. She made reference to three articles from the News and Observer this past Sunday, which shaves that ticket sales have diminished. She distributed copies of these articles to the County Commissioners. The County has budgeted $2.4 million this year for lottery proceeds, and it is in the base budget. The County Commissioners need to discuss how to factor in lottery proceeds in future years into the budget. It is the equivalent of two cents on the tax rate. One of the questions is haw dependent the County should become on the lottery proceeds in the base budget. She made reference to pages 3-6 in the packet, which lists staff's observations. There is also a copy of the lottery bill and a memo from the Local Government Commission. Laura Blackmon said that she is a little concerned about where the funds are budgeted this year. She asked for comments from the County Commissioners. Commissioner Nelson asked about the money that already came in for schools and what it was dispersed for and Donna Coffey said that it is dedicated to pay for school related debt service, acquired after 2003. Commissioner Gordon asked if the proceeds are distributed directly to schools on the basis of per pupil and Donna Coffey said yes, but the County has to apply for the monies. The money is given to the County directly, just like public school building funds. Commissioner Gordon made reference to page 5, and that the money can be used to pay for school construction. She asked if it matters if it is far new space or renovated space and Donna Coffey said that it does not matter. Chair Carey asked about the supplant policy in bold print and asked what happens if the need for spending on school construction goes down. He asked if it could be based on need, or if counties would still have to spend the same amount on school construction whether it needed to ar not. Geof Gledhill said that no one knows at this point. He said that when the legislation was written, this scenario was not imagined. He said that Orange County may be the closest county to this scenario. Commissioner Faushee made reference to the statement about LGC and it being cautious about how to program lottery funds. She asked what is sufficient time having been passed to feel relatively safe to programming the funds. Geof Gledhill said that the legislature will wait and see what happens. Laura Blackman said that she is guessing three to five years to be able to see the pattern. There are other factors that may impact the lottery and it is still in its infancy. Commissioner Nelson made reference to page six and the second bullet. He asked if this is saying that the two cents that has been set aside will be increased to three cents using the lottery proceeds and Donna Coffey said yes. Geof Gledhill said that bills have been introduced this session to change the funding formula, and both of them have been sent to the Rules Committees. He is