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.