Welcome Guest
Log In | Register )
You last visited December 3, 2016, 6:31 am
All times shown are
Eastern Time (GMT-5:00)

Illinois Gov. wants to privatize state lottery

Illinois LotteryIllinois Lottery: Illinois Gov. wants to privatize state lottery

Controversial plan is designed to capture funds for education up-front, but is it worth the gamble? 

Democratic Illinois Governor Rod Blagojevich today will unveil an election-year school funding plan that calls for leasing the state lottery for the next decade to a private firm in return for $10 billion in upfront cash.

Schools would get at least $1 billion a year for the next four years from such a deal, with the remaining $6 billion going into an education trust fund governed by a board appointed by the four legislative leaders, governor, comptroller and treasurer, according to a Democratic source briefed on Blagojevich's proposal late Monday.

The complex schools plan, hatched in the heat of a campaign as Blagojevich sought to prevent a damaging third-party challenge from state Sen. James Meeks, likely will be controversial, criticized by Republicans and leave numerous questions to be answered in the coming months.

The governor's office, however, has tried to keep an uncharacteristically tight lid on details, declining several requests for comment ever since Meeks, the pastor of a large predominantly black South Side church, announced last Friday he would not run for governor because Blagojevich met his demand to find more money for schools.

Two of the looming questions essentially are math problems. The state figures to get at least $650 million from the lottery for the school fund next year even if it doesn't lease the lottery to a private company. So the net increase to schools would seem to be only $350 million a year for four years. It's possible, but unknown Monday, whether Blagojevich will propose other revenue-generating measures to boost the bottom-line figure.

The other math-centered question is what happens after four years, when the state no longer has the $1 billion per year earmarked for schools and also will no longer have the lottery money, since a private company would be reaping that cash through a lease.

Blagojevich's answer for that involves earning interest on the $6 billion trust fund, the source said. It's unclear, however, whether the state could earn enough in investments each year to make up the potential shortfall of $1 billion.

Blagojevich also plans to address long-held voter cynicism about the lottery, which was sold to the public as a way to pay for schools. In reality, lawmakers simply put the lottery money toward schools and transferred money they were spending on schools to other parts of the state budget, often criticized as the "lottery shell game."

Blagojevich is expected to argue that he will end that shell game by spending the lottery proceeds directly on general state aid to school districts and programs like special education that benefit the suburbs, the source said.

The campaign of Republican governor candidate Judy Baar Topinka put enough stock in the lottery lease rumblings that it sent out a news release Monday night highlighting problems at the lottery agency under Blagojevich's watch.

Topinka made it through the GOP primary without putting out a school funding or reform plan and has yet to do so in the general election campaign.

While Blagojevich has been mum so far, he will finally lift the lid on his school-funding puzzle — and his plan to reform the school system — when he speaks at 1:30 p.m. today at a South Side elementary school.

Lottery Post Staff

We'd love to see your comments here!  Register for a FREE membership — it takes just a few moments — and you'll be able to post comments here and on any of our forums. If you're already a member, you can Log In to post a comment.

27 comments. Last comment 11 years ago by darimgdave37.
Page 1 of 2
Rick G's avatar - avatar 1766.jpg
FEMA Region V Camp #21
United States
Member #520
July 27, 2002
5699 Posts
Offline
Posted: May 23, 2006, 4:08 pm - IP Logged

This looks like a major disaster waiting to happen.   What a stupid solution.

The irony is that he's gambling with gambling. Kind of like having a full house poker hand and throwing your pair away hoping for the four of a kind.

Posted 4/6:  IL Pick 3 midday and evening until they hit:  555, 347 (str8).


    savagegoose's avatar - ProfilePho
    adelaide sa
    Australia
    Member #37136
    April 11, 2006
    3300 Posts
    Offline
    Posted: May 23, 2006, 4:22 pm - IP Logged

    also its  giving away a pretty guranteed $650  mill a year, for ever for schools, for $4 bill in next 4 years, then interest on $6 bill.

     

    whats 5% of 6 bill? $300 mill thats assuming the trust can get %5 and not just blow it.

     

    so 1 bil a year then $300 mill after 4 years. guess that guy wil be out of office , and new guys can try n fix up school finance.

      Rick G's avatar - avatar 1766.jpg
      FEMA Region V Camp #21
      United States
      Member #520
      July 27, 2002
      5699 Posts
      Offline
      Posted: May 23, 2006, 4:33 pm - IP Logged

      Believe me, this state will blow it or steal it. When the lottery first started here the lottery proceeds were supposed to be in addition to the current education budget. But it quickly changed to the lottery being the ONLY source of education funds. Where did that original budgeted money go to? A shoebox in someone's closet?

      Posted 4/6:  IL Pick 3 midday and evening until they hit:  555, 347 (str8).


        starchild_45's avatar - spherewall2
        kent, washington
        United States
        Member #3509
        January 26, 2004
        465 Posts
        Offline
        Posted: May 23, 2006, 6:14 pm - IP Logged

        one word for this. "stupid"

          Saleo Paleo's avatar - Trek DS9worm3.gif
          E-Town,Ky
          United States
          Member #3493
          January 25, 2004
          6348 Posts
          Offline
          Posted: May 23, 2006, 6:53 pm - IP Logged

          If you think the lottery is sometimes (Sorta Crooked) You haven't seen nothing until it's privitized.

          Saleo Paleo    

            Coin Toss's avatar - shape barbed.jpg
            Zeta Reticuli Star System
            United States
            Member #30470
            January 17, 2006
            10344 Posts
            Offline
            Posted: May 23, 2006, 8:10 pm - IP Logged

            I agree with every post following the OP. This is one lame idea.

            When you can't really on the state itself to really put the funds from lotto into education there's no way a private firm would do it.

              darimgdave37's avatar - animated sphere.gif
              New Member
              Bloomington, Illinois
              United States
              Member #30219
              January 13, 2006
              5 Posts
              Offline
              Posted: May 24, 2006, 12:00 am - IP Logged

              Last time I checked, private business was in it for itself, NOT for the school system or anyone else.  Somebody should talk to Govenor Rod about his thought processes.

                darimgdave37's avatar - animated sphere.gif
                New Member
                Bloomington, Illinois
                United States
                Member #30219
                January 13, 2006
                5 Posts
                Offline
                Posted: May 24, 2006, 12:03 am - IP Logged

                I'd like to find that shoebox myself.Party

                the party would be awesome!!!

                  dvdiva's avatar - 8ball

                  United States
                  Member #2338
                  September 17, 2003
                  2063 Posts
                  Offline
                  Posted: May 24, 2006, 1:04 am - IP Logged

                  Maybe they could just cut the Dept of Education, give parents vouchers and privatize the schools while they are at it. The problem is that businesses have to make money otherwise they don't exist. Many private schools are ran as non-profits at least around here. The biggest problem is the levy system and very poor executive level management in schools. If they spent half the time they spend on percieved racism/sexism on financial planning it wouldn't be a problem.

                    Rick G's avatar - avatar 1766.jpg
                    FEMA Region V Camp #21
                    United States
                    Member #520
                    July 27, 2002
                    5699 Posts
                    Offline
                    Posted: May 24, 2006, 8:31 am - IP Logged

                    Darimgdave,

                    If you want to find the shoebox it's usually in the Secretary of State's closet.

                    Let's get that party started!

                    Posted 4/6:  IL Pick 3 midday and evening until they hit:  555, 347 (str8).



                      United States
                      Member #3676
                      February 10, 2004
                      425 Posts
                      Offline
                      Posted: May 24, 2006, 10:34 am - IP Logged

                      How about doing what a private company would do? Get rid of the red tape admin costs, jack up the payout percentages, people will play more, and you will make more. This is why politicians are really useless. Companies should be lining up to buy this.


                        United States
                        Member #379
                        June 5, 2002
                        11296 Posts
                        Offline
                        Posted: May 24, 2006, 10:54 am - IP Logged

                        How about doing what a private company would do? Get rid of the red tape admin costs, jack up the payout percentages, people will play more, and you will make more. This is why politicians are really useless. Companies should be lining up to buy this.

                        Maybe if NY privatized its lottery (which Connecticut has done to at least some extent), its Rotto would have an acceptable payout return.

                          Avatar
                          Northern California
                          United States
                          Member #19948
                          August 9, 2005
                          151 Posts
                          Offline
                          Posted: May 24, 2006, 11:58 am - IP Logged

                          I'm not at all clear on the specific merits of the Governor's proposal...I have many of the same concerns expressed here on the proposed financial structure of the deal.

                          Clearly, if a firm puts up $10 billion they will look to make a minimum return on that upfront cost.

                          That said, some of the arguments against privatization in general are simply unsupported by facts or history. CT can hardly be said to be privatized - they are not a state agency but if you think they operate free of the state or state bureaucratic pressures I would invite you to actually work with them and observe them as I have.

                          For all of the claims that state agencies are more secure and "noble" the facts are that the privatized aspects of state lotteries uniformly perform better (better performance and accountability and lower cost) then their state-run counterparts.  Vendor employees (like the sales reps in TX) are held strictly accountable for the quantity and quality of their assigned duties. Try telling that to a CA Lottery sales rep whose collective bargaining agreement specifically forbids holding him accountable for any aspect of his performance or even malfeasance. You'd be amazed at how many of them work about 20 hours a week, many of them have second jobs where they work during the week while collecting a state paycheck. Oh and by the way, almost all of them collect the full $12,000 per year "performance bonus" even in years that sales are flat are rise only very slightly. Not a bad $50,000 a year gig...especially if you can get it with state retirment & benefits, etc. Of course, someone has to pay for those very generous benefits in the future...

                          I would also not like to see the Security function outsourced - but I do agree that state lotteries should be sales and marketing organizations not run by constant vetoes of power hungry security officials. These are the same guys who stocked the CA Lottery "armory" with automatic weapons and grenade launchers...   

                            Coin Toss's avatar - shape barbed.jpg
                            Zeta Reticuli Star System
                            United States
                            Member #30470
                            January 17, 2006
                            10344 Posts
                            Offline
                            Posted: May 24, 2006, 4:56 pm - IP Logged

                            The Chicago Tribune today had an article that said 3 cents of every dollar went towards admin. costs and 57 cents went to the prize pool. If that's accurate does Blogo (Governor Blagojevich) think a private firm can cut the admin costs to under 3 cents on a dollar?

                            Here's the breakdown:

                            Where each lottery dollar goes, fiscal year 2004: 

                            57 cents - prizes awarded to winners

                            33 cents - common school fund 

                            7 cents - to vendors and retailers

                            3 cents- operating expenses

                             

                            have to wonder if that is valid or

                            Once upon a time....