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Maine lawmakers suspicious of plan to borrow against lottery funds

Maine LotteryMaine Lottery: Maine lawmakers suspicious of plan to borrow against lottery funds

The G-word, otherwise known as "gimmick," was invoked frequently Thursday as lawmakers learned that Gov. John E. Baldacci plans to borrow against a portion of Maine's state lottery revenues to balance a $5.5 billion, two-year budget.

Not entirely unlike the governor's decision to lease out the state's retail liquor operations for $125 million two years ago, Baldacci reportedly is planning on exchanging the state's proceeds from online games such as Powerball and Megabucks with a Wall Street brokerage firm for 10 years for an upfront payment of $250 million.

Estimates on what the total revenue from the lottery games would be over 10 years were not available.

The governor said further details on the plan would be revealed today when he makes his budget available for review.

"This will be a good investment, a timely investment and one in which we'll be able to grow our economy, attract jobs and industry and, at the same time, have the opportunity to strengthen Maine's financial standing," the governor said.

House Republican Leader David Bowles of Sanford said the Baldacci plan was another example of the governor's willingness "to mortgage our children's future to balance current budgets."

"I would think that we would have a hard time accepting that," Bowles said, adding that if the governor had reduced state spending as GOP lawmakers had requested two years ago, he wouldn't have to look at proposals like leasing out a portion of state lottery revenues.

Senate President Beth Edmonds, D-Freeport, said she had only recently heard about the lottery plan Thursday and needed to know more.

"I'm not so sure about that," she said. "I want to know what that actually means in the budget and how it actually works. Is it really and truly an investment and does it give us enough for what we're giving up?"

"It's another gimmick," said Senate GOP Leader Paul Davis, of Sangerville. "[The administration] is full of horse feathers."

Before reaching a decision on the wisdom of leasing out another state revenue stream for 10 years, House Speaker John Richardson, D-Brunswick, said he would want to know what the state would lose by not taking the upfront $250 million payment.

"I'll have to weigh the $250 million advance against what the real cuts could be in social programs," he said. "If that looks too deep for me and doesn't create the kind of social safety net that protects drugs for the elderly and other such social programs, I might be more open to an advance."

Baldacci said his administration was holding growth in the state's General Fund to 3.5 percent with a budget that provides tax cuts, meets education responsibilities, grows the economy and reduces the overall tax burden. He asked lawmakers to keep an open mind on the lottery proposal until they could see the entire budget package.

"There's a lot of structural changes in the budget, and when you look at the whole budget you'll see streamlining, you'll see restructuring, elimination of positions and changes in approaches with respect to the design of health care programs and how they work," he said.

Sen. Peter Mills, R-Cornville, said he opposed capitalizing the lottery revenues, adding the plan was simply a way to sell off the tax stream.

"He's done this before with hard liquor and it's completely irresponsible," Mills said. "If this continues, I'm going to become increasingly concerned. The idea of the state going broke is very real. You just can't take your revenue streams and keep selling them off."

Baldacci countered the lottery portion of his budget is just another effort to change government with respect to the cost of education and health care services.

"It's a responsible budget," he said. "People may agree or disagree about it, but the point is that it does not raise taxes, and we can maintain our competitive edge, grow the economy and incomes of people so we'll be able to further broaden Maine's economic base."

Bangor Daily News

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1 comment. Last comment 12 years ago by CASH Only.
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Member #379
June 5, 2002
11296 Posts
Posted: January 14, 2005, 11:23 am - IP Logged

Relax...Maine finally has Powerball...