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<br />In addition, the Policy outlines a formula for determining the amount of pay-as- <br />you-go revenue available for school and County projects. In accordance with the <br />capital funding policy, pay-as-you go revenue is defined as the amount of money <br />from all non-debt dedicated capital revenue (sales and property taxes, Public <br />School Building Funds and School Construction Impact Fees) that remains after <br />repayment of all school and County capital related debt. <br />It is important to note that full funding of the recurring capital portion of the policy <br />has been deferred since its adoption in 2005. The Board's plan has been to <br />phase in full funding of recurring capital (the equivalent of four cents on the ad <br />valorem property tax) over a period of time. To that end, the Board has <br />allocated the equivalent of two cents, for each of the last two fiscal years, to <br />school recurring capital. The additional two cents needed to fully fund the policy <br />(one additional cent for schools and one cent for County) has not been funded to <br />date. <br />Lottery Proceeds <br />During work sessions in the spring of 2005, the Board considered how proceeds <br />from the then unapproved State lottery might factor into the capital funding policy;. <br />however, it seemed premature then to consider lottery proceeds as dedicated <br />capital revenue since the General Assembly had not actually authorized a lottery <br />at that time. In August 2005, soon after the Board adopted the current capital <br />funding policy, the North Carolina Education Lottery Act ("the Lottery" or <br />"Lottery") was signed into, law. (See N.C. Gen. Stat. § 18C). <br />However, even with the establishment of the Lottery, many fundamental issues, <br />such as when the County would begin receiving Lottery proceeds, the amount of <br />receipts and allowed expenditures remained uncertain until very late in the 2006- <br />07 budget planning process. Based on recommendations from the North Carolina <br />Association of County Commissioners (NCACC), the County Manager's <br />recommended General Fund budget anticipated receiving $2.4 million in Lottery <br />proceeds during the 2006-2007 fiscal year, and the Board approved the <br />recommendation. <br />The Manager also recommended in his Budget Message that the Board revisit its <br />May 2005 capital funding policy and consider earmarking all future Lottery <br />proceeds once the Lottery revenue stream was more established and <br />predictable. <br />In October 2006, the State made its first distribution of Lottery proceeds - $38 <br />million was distributed to the 115 school districts throughout the State. Of this <br />total, Orange County Schools received $230,696, and Chapel Hill Carrboro <br />Schools received $378,348. <br />Z