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Calif. Gov: Sell lottery to fund health care

California LotteryCalifornia Lottery: Calif. Gov: Sell lottery to fund health care

Hoping to rejuvenate lagging negotiations over health care reform, Gov. Arnold Schwarzenegger said Tuesday that he wants to use the state lottery to help finance his plan that would require all Californians to have health insurance.

The Republican governor said at a news conference that he wants to lease the lottery to a private group and use about $2 billion a year of the proceeds to pay for his health insurance plan, without diverting any lottery funds used for education.

The proposal is part of a larger health care financing initiative whose fate voters would decide in November 2008.

But before he can go to the ballot, Schwarzenegger must reach agreement with Democrats on a sprawling health reform plan. The sticking point remains cost: Schwarzenegger wants to require everyone to carry insurance, but Democrats say he must first demonstrate how he would make it affordable for lower- and middle-class Californians.

Although the governor has won considerable business backing for his plan, consumer and labor groups say he has failed the affordability test.

New idea

Schwarzenegger suggested earlier this year leasing the lottery to help shore up the state budget, but the idea of using the proceeds for health care is new. The governor said California's lottery generates less money per capita than many other states.

"There is someone who will do a better job, who will get more money for the taxpayers," Schwarzenegger said. Under one scenario, according to the governor's finance aides, a private management company would pay $37 billion for a 40-year lease. The state would use that money to create a $2 billion-a-year annuity to pay for health insurance (education, which receives about $1.1 billion annually from the lottery, would be unaffected). The price tag on the governor's health care plan is $14 billion a year.

The lottery funding stream for health care, however, would expire in 15 to 25 years, at which time the state would have to find money to replace it. There also are questions about whether the fund would grow fast enough to keep up with spiraling health care costs.

Beyond that, advocates for the working class said a plan that encourages an increase in lottery sales would disproportionately hurt lower-income people, who studies show spend more of their money on the lottery.

"The governor's proposal would ask more Californians, particularly low-income Californians, to gamble away more of their hard-earned dollars to pay for health reform," said Jean Ross, executive director of the California Budget Project, which researches issues that affect the working class.

Nonetheless, tapping the lottery could allow the governor to sidestep a more politically risky idea he had been considering: Asking voters to raise the sales tax to pay for health care. Pollsters said including a sales tax increase in a health care ballot initiative would jeopardize its chance of passing.

Schwarzenegger has made national headlines since he unveiled his universal health insurance plan in January — a plan that some say could become a national model — but it was based on a 10-page document outlining his ideas. Tuesday was the first time he released an actual bill, spelling out the details.

The governor shifted on a few issues. His January proposal included a 4 percent payroll fee on businesses with fewer than 10 employees that don't provide health insurance. Now he proposes exempting only businesses with a payroll of less than $100,000. Those with payrolls up to $200,000 would pay 2 percent if they don't provide insurance; those with payrolls over $200,000 would have to pay 4 percent.

A few other changes: Schwarzenegger dropped a proposed 2 percent tax on doctors' revenues. Although he still would bar insurers from rejecting people with pre-existing conditions, he would allow rates to be set based on a person's health status — within limits — for several years.

Tax credit

Schwarzenegger also proposes a new tax credit for some lower-income people who wouldn't have qualified for subsidies under his original plan. Finally, although he would require everyone in the state to carry insurance, his plan does not spell out what should be included in the minimum benefit package they would have to buy.

Critics say that could create a situation where people are forced to pay hundreds of dollars a month for insurance, but end up with only catastrophic coverage.

"If you're going to require everyone to have insurance," said Beth Capell, a health care lobbyist who represents labor, "you ought to make sure they're going to be able to afford to pay the premiums and get good care."

Schwarzenegger said he wants to complete a health care deal with lawmakers within two weeks.

San Jose Mercury News

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7 comments. Last comment 9 years ago by computerhead723.
Page 1 of 1
LOTTOMIKE's avatar - cash money.jpg
Tennessee
United States
Member #7853
October 15, 2004
11338 Posts
Offline
Posted: October 13, 2007, 9:11 am - IP Logged

why do governments always mess with lotteries?

    Timmer692002's avatar - Lottery-036.jpg
    Shelby Twp,MI
    United States
    Member #1883
    July 19, 2003
    290 Posts
    Offline
    Posted: October 13, 2007, 12:57 pm - IP Logged

    It starts first with the lottery

     MARRIAGE the only WAR were it's okay to sleep with the enemy!!!

    Better single than SORRY!!

    Marriage - the LAST decision a man can make! Dead

      Todd's avatar - Cylon 2.gif
      Chief Bottle Washer
      New Jersey
      United States
      Member #1
      May 31, 2000
      23261 Posts
      Online
      Posted: October 13, 2007, 1:16 pm - IP Logged

      why do governments always mess with lotteries?

      Because lotteries generate an enormous amount of money, and money = power.  Politics is 100% about power.

       

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

       

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

        Avatar
        Northern California
        United States
        Member #19948
        August 9, 2005
        151 Posts
        Offline
        Posted: October 15, 2007, 10:52 am - IP Logged

        Todd nailed it right on the head.

         

        While this concept may have promise on other states, the chance of it ever happening, or working the way AHHHnuld says it would range from slim to none.

         

        First - the teachers unions OWN the CA legislature. It takes a 2/3 majority to amend the Constitution - and this proposal effectively caps $$$ to education to generate more $$$ for health care. The teachers will never stand for it (unless someone GUARANTEES them a lot of ther $$$ form somewhere else).

         

        The idea that someone would pay 30 years worth of lottery profits up front - and still have to operate under the current restrictions on payout, game structure (thanks to a Supremem Court ruling, ALL onlilne games must be pari-mutuel so no one ever knows what they are playing for) and others is a non-starter.

         

        It is true that the CSL is a bloated, inefficient organization that is a graveyard for innovation and good management. This proposal doesn't look like it fixes any of that.

          psykomo's avatar - animal shark.jpg

          United States
          Member #4877
          May 30, 2004
          5120 Posts
          Offline
          Posted: October 15, 2007, 4:11 pm - IP Logged

          Because lotteries generate an enormous amount of money, and money = power.  Politics is 100% about power.

          Thinking of...can anyone on this EARTH.....BELIEVE THIS??? ??????????????                 "WOW"

          weight lifter's "OR" way.......out of it

          o!o........o!o.........o!o.........o!o.....o!o^^^^

          DON't need a gov with 2 heads

          or a goverment that is ............"DOUBLE-MINDED" !!!!!!!!!!!!!!!!!

          HAS "Lottery" manager's GONE>>>>>

          KRAZY???????????

            psykomo's avatar - animal shark.jpg

            United States
            Member #4877
            May 30, 2004
            5120 Posts
            Offline
            Posted: October 15, 2007, 4:35 pm - IP Logged

            Todd nailed it right on the head.

             

            While this concept may have promise on other states, the chance of it ever happening, or working the way AHHHnuld says it would range from slim to none.

             

            First - the teachers unions OWN the CA legislature. It takes a 2/3 majority to amend the Constitution - and this proposal effectively caps $$$ to education to generate more $$$ for health care. The teachers will never stand for it (unless someone GUARANTEES them a lot of ther $$$ form somewhere else).

             

            The idea that someone would pay 30 years worth of lottery profits up front - and still have to operate under the current restrictions on payout, game structure (thanks to a Supremem Court ruling, ALL onlilne games must be pari-mutuel so no one ever knows what they are playing for) and others is a non-starter.

             

            It is true that the CSL is a bloated, inefficient organization that is a graveyard for innovation and good management. This proposal doesn't look like it fixes any of that.

            L@@K>>>>"OUT"

            EARESTEN !!!!!!!!>>>>>.....seacoast!!!!!!!

            "HERE>>>>>>>>IT>>>....."CUM's">>

            trend's "DO">>>>DEVELOP on WEST

            COAST & work themselve's>>>>>EAST!!

            "praise" LP for (NEW's)!!!!!!!!!

              computerhead723's avatar - lightbulb
              Buffalo
              United States
              Member #54397
              August 17, 2007
              245 Posts
              Offline
              Posted: October 15, 2007, 9:23 pm - IP Logged

              why do governments always mess with lotteries?

              just  what  I  tried  to  stipulate  in  CORPORATE  LOTTERY  FOURM this  sounds  bad  even  dangerous,

              can  you  think  why  a  privet  firm  would  shell  out  37 Billion  for  Calfornia Lottery  dollars  and  make  a  proffit ???????  There  is  more  to this  than  you  think;

                I do  like  health  care - rather  than  just   education  funding, people  need  for  someone  to  help  with  those  high  Doctors  and  perscription  cost  and  what   about  those  Cat scans ....whew...

              But  making  the  Lottery  all  profit  means  less  winners and  less  payouts  ....must  be  so  much  money  they  are  making  their  not  telling  the   whole  story;  income  like  I  said  in  NY  is  about  1. 4 Billion   per  week ........state  wide .....and  over  100,000   retailers  selling   instants  tickets  and  lottery  numbers  and  then  there  is  the  Video  lottery money   and   hourse  raceing  commission   and  get  this   we   still   pay  incme  taxes  and  sales  tax   and  we   donate  money  for  polititions  to   run  for   office  ;

              MONEY  ...MONEY  ....MORE  MONEY ???Smash