Gov. Corzine approach to N.J. financial woes: sell everything, including the lottery
State officials are studying whether selling the New Jersey Lottery to a private company can reap big money for cash-strapped state coffers, Treasurer Bradley Abelow said yesterday.
Abelow said letting a private firm buy the lottery — and collect its substantial winnings — is one idea gaining favor as part of a year-long review of whether the state should sell or lease public assets such as the New Jersey Turnpike.
Selling the Turnpike and other toll roads remains high on the list of proposals under consideration, he said. The state also is considering selling other transportation assets such as the land around train stations to help end the state's fiscal woes.
"We're glancing at everything," Abelow said. "What we've found is there's a lot of stuff that deserves deeper analysis. It was a lot more than we anticipated."
Abelow stressed it will probably be at least six months before his staff will be able to analyze the more complex plans like a Turnpike sale before making recommendations to Gov. Jon Corzine.
The treasurer said details of any lottery transaction are far from resolved, and he could not estimate the potential take from such a deal except to say the revenue "would have to be well in excess of what we enjoy today."
The state currently controls the lottery and uses a private firm to operate the lottery machines. Selling the entire lottery could provide the state with a huge windfall, and the buyer could get its annual revenues.
In Illinois, Gov. Rod Blagojevich floated the idea in May of raising $10 billion by selling his state's lottery, which earns about $600 million annually. To date, however, lawmakers have not taken up his plan.
No U.S. state has tried such a deal, Abelow said, but Italy and Greece have sold off portions of their lotteries, reaping millions.
This year, the state plans to take in about $836 million from the lottery, making it one of its largest sources of revenue. The money is used to help fund colleges and universities and programs for school nutrition, veterans and those with physical disabilities and mental illness. The lottery sells tickets through 6,100 merchants.
Three months ago, Corzine directed Abelow to conduct a 90-day study of public holdings that might be ripe for use as revenue generators. Since then, the state has paid financial giant UBS $65,000 to manage the study and conduct weekly meetings with Abeleow, Transportation Commissioner Kris Kolluri and others.
The idea of selling or renting out public holdings was first floated last year, when then- Gov. Richard Codey suggested it might be possible to realize billions by selling operating rights to the New Jersey Turnpike.
That proposal, and similar plans for the Atlantic City Expressway, the Garden State Parkway and other transportation assets, remain at the heart of the ongoing discussion, Abelow said.
Some assets, such as beaches, parks, prisons and airports, have been largely ruled out as likely candidates for sale or lease because state officials have determined they would not attract bidders or have concluded they would be too complicated to package for private management, Abelow said.
One money-raising idea has been rejected entirely. There won't be a corporate sponsor for the New Jersey Statehouse like there are for sports stadiums and arenas.
"We've explicitly excluded Statehouse naming rights," Abelow said.