Welcome Guest
Log In | Register )
You last visited December 3, 2016, 4:44 pm
All times shown are
Eastern Time (GMT-5:00)

Illinois lottery privitization plan panned by tax group

Illinois LotteryIllinois Lottery: Illinois lottery privitization plan panned by tax group

An estimated $10 billion windfall from the sale or lease of the Illinois Lottery for state education funding would be short-lived, maintains a new report by the Center for Tax and Budget Accountability, a Chicago-based fiscal policy think tank.

Introduced by Gov. Rod Blagojevich May 23, the proposal calls for funneling $4 billion in sale proceeds for school construction, text books purchases and new programs, such as full-day kindergarten and a longer school year.

The remaining $6 billion would be pooled into an investment fund meant to provide $650 million annually in education fund revenues through 2025.

Officials from the Center for Tax and Budget Accountability point out that, without an alternative funding source in place, once the proceeds from the sale are spent, they are gone forever.

"If the state just kept the lottery, we'd have that revenue growth every year. Selling it means those revenues simply go away. What happens in 2025?" said Chrissy Mancini, director of budget and policy analysis with the Center for Tax and Budget Accountability.

Currently, the Illinois Lottery annually provides about $620 million for the state education budget after paying winners and other costs.

Under Blagojevich's proposal, $1 billion from the lottery sale would be delivered to state schools in the first year of the program. Proceeds from the sale, coupled with interest, taxes paid by the new lottery owner and other revenue, would pump another $1.35 billion in education in year two, $1.65 billion in year three and $2 billion in year four, a total of $6 billion in new funding.

In year five, the extra funding would cease, and funding levels would return to normal, about $650 million annually. That revenue would be generated from the state's investment of the remaining $6 billion of the lottery's $10 billion price tag.

But Mancini said it is impossible to guarantee that the state would get full returns on its $6 billion investment.

"In order to match those estimated returns, the state would have to lock in a rate higher than the market rate, and that's just to get back the $650 million a year," she said.

Besides, it's debatable whether $650 million will be sufficient to fund education in the years to come without taking into account inflation, Mancini said.

"In all the analyses we've done, tax revenue growth doesn't match inflation, which means there will be no extra money available to put into schools. If [the proposal] passes, which is not likely, where will that new revenue growth come from?" Mancini said.

In criticizing Blagojevich's plan, the Center for Tax and Budge Accountability joins GOP leaders, who doubt that the lottery could garner a buyer willing to pay $10 billion price tag.

Blagojevich hopes the General Assembly will vote on the privatization deal during the fall veto session.

Pioneer Press

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.

6 comments. Last comment 10 years ago by Rip Snorter.
Page 1 of 1
bellyache's avatar - 64x64a9wg

United States
Member #12618
March 18, 2005
2060 Posts
Offline
Posted: June 22, 2006, 12:45 pm - IP Logged

I'm glad the lottery privitization plan didn't go thru. I hope other states thinking about doing this drop it.

Dance like no one is watching.

    Avatar

    United States
    Member #1826
    July 11, 2003
    2645 Posts
    Offline
    Posted: June 22, 2006, 10:13 pm - IP Logged

    I'm glad the lottery privitization plan didn't go thru. I hope other states thinking about doing this drop it.

    Well it didn't go through, but that's only because they haven't voted on it yet.

    (insert signature here)

      Todd's avatar - Cylon 2.gif
      Chief Bottle Washer
      New Jersey
      United States
      Member #1
      May 31, 2000
      23259 Posts
      Offline
      Posted: June 23, 2006, 11:35 am - IP Logged

      I'm glad the lottery privitization plan didn't go thru. I hope other states thinking about doing this drop it.

      They did not drop it.  Look at the last sentence:

      "Blagojevich hopes the General Assembly will vote on the privatization deal during the fall veto session."

       

      Check the State Lottery Report Card
      What grade did your lottery earn?

       

      Sign the Petition for True Lottery Drawings
      Help eliminate computerized drawings!

        LOTTOMIKE's avatar - cash money.jpg
        Tennessee
        United States
        Member #7853
        October 15, 2004
        11338 Posts
        Offline
        Posted: June 24, 2006, 2:11 am - IP Logged

        lets hope this doesn't get passed.i don't like a lot of the things happening lately like this and the online thing.these government idiots are trying to crash the party.........

          Avatar
          New Member
          chicago
          United States
          Member #41166
          June 12, 2006
          4 Posts
          Offline
          Posted: June 25, 2006, 10:17 pm - IP Logged

          well the first thing that will happen after privatization,  is the numbers will increase as well as the cost.  look what happened when the illinois/indiana skyway sold.  The toll was $2.00,  went up to 2.75!!!!!!!!!!fkn jerks

            Avatar
            New Mexico
            United States
            Member #12305
            March 10, 2005
            2984 Posts
            Offline
            Posted: June 27, 2006, 3:38 pm - IP Logged

            Illinois might be using good sense in this. 

            There's no reason to assume the lotteries would be run worse than they're being run now.  Too bad they can't just privatize the MM part of things and keep the state lottery part.... I really love Little Lotto and the Illinois Lotto.  Wish I could play them.

            But getting rid of MM any way it can be gotten rid of might equate to catching a rattlesnake living under the kitchen table and dropping him through an open window of an unpleasant neighbor.

            Whatever's going on with MM money, no sense in tempting state workers by having them in proximity with it day to day.  Staying honest is difficult enough under the best of stars.

            J

            Absorb the good, ignore the bad, weigh the ugly.

            It's about number behavior.

            Egos don't count.

             

            Dedicated to the memory of Big Loooser