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Older Pennsylvanians lose from lawmakers' raid on lottery fund

Jan 13, 2017, 7:32 pm

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Pennsylvania is now six years into the glut of baby boomers aging into their senior years and it's taking a toll on the Pennsylvania Lottery, which pays for the programs that serve them.

Unless some changes happen and/or lottery ticket sales rise dramatically, the budget office projects the lottery fund that pays for senior programs could come up more than $70 million short in the next fiscal year and the situation worsens in ensuing years.

"We've been hit by the tsunami," said Vicki Hoak, CEO of the Pennsylvania Homecare Association. "We've started seeing this big increase in people looking for help."

Waiting lists for personal care, meal preparation, adult day care and other services that allow seniors to remain in their homes are growing despite an increased number being served.

The ramped-up demand for those services and other programs that rely on lottery proceeds for funding is increasingly a concern to groups that advocate for senior citizens.

Despite the lottery's record-breaking performance in recent years — including  ticket sales of $4.1 billion last year generating $1.1 billion for senior programs — Ray Landis, AARP Pennsylvania's advocacy director, points out nothing about that revenue stream is guaranteed.

"You are relying on ticket sales and that a big Powerball jackpot will come along," he said. "You can only make the magic happen for so long."

Adding to their worries are the state's population projections. Currently, 17 percent of Pennsylvanians are age 65 and older, according to the most recent census data available. By 2030, projections call for that percentage to grow to about a quarter of the state's residents. What's more, with people's longer life spans, a growing portion of seniors are 85 and older.

"When people live longer, there tends to be more frailties that occur" and more likely to need lottery-funded services, said Rebecca May-Cole, executive director of the Pennsylvania Association of Area Agencies on Aging.

So between those factors and the increased cost of providing services, the pressure is on the Pennsylvania Lottery to grow its revenues and turn bigger profits.

State Budget Secretary Randy Albright said in a recent interview, "I don't want to get ahead of ourselves since those discussions are ongoing but by the time we get to our February 7 budget address, you'll hear the governor talk about further steps in that regard." 

He said it's also likely the 10-year-old practice of relying on lottery funds to help offset more than $300 million for nursing home and other services for Medicaid-eligible seniors will need to change and shift more of that burden back on the state's general fund.

"We have to obviously consider a whole list of options," Albright said. He made clear, however, that there is one option that is not on the table. "The governor is not interested in reducing services to seniors or reducing eligibility for seniors."

Drew Svitko, executive director of the Pennsylvania Lottery, said he is feeling the added pressure to increase lottery revenues.

"We know that there is more need than we could possibly generate money for. So as long as I've been here, we've always struggled and fought to find ways to generate money. So yes, we absolutely feel the pressure to do that because we know older Pennsylvanians are counting on it," he said.

Besides funding those Medicaid programs, the proceeds from the lottery pay for property tax and rent rebate, prescription assistance, free- and reduced-fare transportation, and home- and community-based services for non-Medicaid-eligible seniors.

Since the lottery's creation in 1971, it has provided nearly $27 billion for programs that benefit the state's older citizens.

Balls in the air

As a result of the increased pressure to grow revenues, Svitko admits the lottery has a lot of balls in the air to try to meet that goal while taking care of lottery retailers and giving players games they want to play, doing so in a responsible way. All of the new initiatives that Lottery has or soon will launch center around making lottery play more convenient, relevant and ubiquitous, he said.

Among them is a "play at the pump" pilot that allows motorists to buy Powerball and Mega Millions tickets at the pump.

"We learned that 70 percent of gas customers don't walk into a convenience store so we worked with our vendor and a third-party supplier to bring this technology to Pennsylvania to test it to see whether or not it makes business sense for us and ultimately, more revenue profits for older Pennsylvanians." Svitko said.

This pilot, launched nearly a year ago, made lottery play available at 686 gas pumps at 88 locations, said lottery spokesman Gary Miller. Playing at the pump only allows players to choose numbers using "quick pick" and automatically deposits winnings of $600 or less on the credit card used to buy the ticket.

"The early results are promising," Svitko said. "We're going to expand our pilot a little bit to get more data, and just measure, measure, measure. We are all about making good business decisions and taking intelligent risks where we can."

Gift cards for lottery tickets is another idea being piloted. The lottery placed them at about 2,000 stores across the state. Some are lottery retailers and some aren't. The gift cards can be purchased for amounts of $25 up to $100 or $200, depending on the retailer, and can be redeemed for tickets at any lottery retailer after a 30-minute activation period.

"Over the holidays, we saw more people choosing that option," Svitko said. But the jury is still out on whether the gifts cards will become a permanent part of the lottery's product line. "Those cards have a cost and we have to make sure we are generating enough money to make it worthwhile."

Another idea being piloted on a much smaller scale at just 74 out of the lottery's nearly 9,100 retailers is the use of debit and credit cards to buy lottery tickets.

"One of the things we have to guard against is people using credit to buy lottery tickets in a way that isn't healthy for them," Svitko said. "While we don't define what that is, because that's different for everybody, but it's something we're concerned about."

On the other hand, the lottery executive director said there also is a recognition that fewer people carry cash these days.

"We as a lottery were thinking about what this lottery looks like and operates like and what the retail world looks like in 2025 and maybe beyond that," Svitko said. "We have to figure out the card space. So we are starting now because someday it's going to be really important that we have that."

To date, the lottery found the debit/credit card ticket sales amount to only 3 percent of tickets sold where that pay option is available. Of that, about 70 percent of players choose debit to pay for their tickets.

"That's another thing we're learning. If we decide to roll it out, we might not hurt ourselves if we don't do credit. That avoids a whole different set of concerns," he said.

The lottery also has placed machines to sell tickets in about half of the state's wine and spirits stores. It launched the "Wild Ball" game enhancement to its Pick 2, 3, 4, and 5 family of games that gives players another way to win.

Next month, it is scheduled to unveil a new category of games called Fast Play that Miller described as "like an instant game without the scratch off." Players will be able to determine if they won right at the lottery terminal or self-service machine in a mess-free way.

"We're trying everything we can," he said, while keeping the lottery's operating costs at or under 2 percent of ticket sales.

It also is preparing in the event the Legislature changes the law to allow the lottery to sell tickets on the Internet. So far, four states have launched iLottery, as it is called, or are looking at it with Michigan being the state that is out in front on this initiative and having success with it.

"Years ago, we saw this coming and so years ago, we started getting ready for it with the development of an app, development of social media outreach, a VIP Players Club, a mobile-optimized website," Svitko said. "All of these things were done in an effort to get people used to seeing us online and to build that online community so that someday whenever that day comes, when we are given authority to sell online, we're ready for it."

The board of the Pennsylvania Association of Area Agencies on Aging thinks the time has arrived. In August, it unanimously passed a motion to endorse the iLottery legislation as a means for increasing revenue to support programs and services for older adults.

Waiting lists grow

While state data shows the number of seniors receiving property tax and rent rebates and using free- and reduced-fare transportation has generally been declining over the past five years, those waiting for lottery-funded home- and community-based services is growing.

Those services include help in bathing and grooming, adult day care, care management, and meal preparation. At last check, May-Cole said there was a waiting list of about 4,200 people for those services. That is up from 3,000 a year ago and from 1,000 a few years ago.

"Those are people we really have a chance to do something for to keep them out of the nursing home," Hoak said. "If we can give them a few hours of care, we can prolong their stay at home for almost a year."

According to the state Department of Aging, the number of seniors who received "help at home" services rose to 21,530 in 2015-16, up from 19,793 two years before.

What the senior citizen advocates find disturbing is the waiting lists for services could likely be eradicated or cut dramatically if lawmakers weren't taking about a third of lottery profits to prop up Medicaid-funded nursing home and support programs that the general fund formerly supported.

"They figure they can do that because it goes to seniors," May-Cole said. But the advocates argue that runs counter to the lottery's original intent of providing services to keep seniors in their home.

Albright thinks using a portion of lottery dollars to offset the costs of Medicaid programs is appropriate to a degree but not if it leads to the lottery fund becoming insolvent.

"We have to figure out some way to further increase lottery revenues or take back or further reduce the general fund's reliance on the lottery fund revenues," Albright said, pointing out any shifting of the cost to the general fund in 2017-18 would add to the $1.7 billion budget shortfall the state expects to face. 

House Appropriations Committee Chairman Stan Saylor, R-York County, said lawmakers knew this day would come when they made the decision a decade ago to tap the lottery fund to help pay for Medicaid programs.

"We knew we couldn't continue funding everything out of lottery that we do," he said. "There's also a lot of discussions about different games to increase revenue. Those are all things we're going to take a look at."

He said that's all part of the reinventing government initiative that he and House Majority Leader Dave Reed, R-Indiana County, are talking about — deciding what should be funded, what has outlived its usefulness, and whether changes should be made to improve programs and services and make them more efficient.

But senior citizen advocates say moving the funding for Medicaid programs and the Department of Aging's administrative costs out of the lottery fund is the place to start. Going forward, they agree more will have to be done to beef up funding given the continuing wave of Pennsylvanians entering their senior citizen years.

"The lottery folks are able to make the revenues happen," Landis said. "But to ask them to find some way to keep up with the overall population trends over the next decade is the real situation we're worried about."

How many seniors are helped by the Pennsylvania Lottery?

Demands on some senior citizen programs funded by the Pennsylvania Lottery are changing with an increase in the state's 65 and over population. Longer life spans and increasing costs for providing those programs and services are also adding pressure on the lottery to make more money.

For some of the programs, proceeds from the lottery are their sole source of funding.

According to data from various state departments that oversee those programs serving older Pennsylvanians, the number of seniors served by the various lottery-funded programs fluctuates from year to year as illustrated by this five-year historical look at each program's usage.

Caregiver support

  • 2015-16: 5,196
  • 2014-15: 5,638
  • 2013-14: 6,374
  • 2012-13: 7,150
  • 2011-12: 7,280

Protective services (investigating reports of elder abuse)

  • 2015-16: 27,078
  • 2014-15: 24,495
  • 2013-14: 22,817
  • 2012-13: 17,050
  • 2011-12: 13,010

Health & wellness services (i.e. exercise and nutrition classes, health screenings, falls prevention)

  • 2015-16: 142,542
  • 2014-15: 172,448
  • 2013-14: 175,320
  • 2012-13: 209,614
  • 2011-12: 239,587

Help at home (home support, personal care, personal assistance services)

  • 2015-16: 21,530 (2,892,968 hours of services provided)
  • 2014-15: 22,007 (2,778,450 hours of services provided)
  • 2013-14: 19,793 (2,393,062 hours of services provided)
  • 2012-13: 17,166 (2,321,023 hours of services provided)
  • 2011-12: 19,029 (2,460,525 hours of services provided)

Meals

  • 2015-16: 155,448 (8,778,084 meals provided )
  • 2014-15: 166,407 (8,753,642 meals provided)
  • 2013-14: 156,116 (8,307,757 meals provided)
  • 2012-13: 156,543 (8,385,649 meals provided)
  • 2011-12: 160,571 (8,852,537 meals provided)

Free- and reduced-fare rides given to seniors

  • 2015-16: 5,621,567
  • 2014-15: 6,042,292
  • 2013-14: 5,923,143
  • 2012-13: 6,183,599
  • 2011-12: 6,446,899

Employment counseling & referrals

  • 2015-16: 814 (49 percent found jobs)
  • 2014-15: 774 (47 percent found jobs)
  • 2013-14: 762 (40 percent found jobs)
  • 2012-13: 875 (31 percent found jobs)
  • 2011-12: 694 (42 percent found jobs)

Insurance counseling to Medicare-eligible individuals

  • 2015-16: 339,459
  • 2014-15: 216,279
  • 2013-14: 217,727
  • 2012-13: 109,560
  • 2011-12: 90,209

Prescription assistance

  • 2015-16: 290,850
  • 2014-15: 300,758
  • 2013-14: 310,932
  • 2012-13: 321,388
  • 2011-12: 335,001

Ombudsmen (an advocate to help assist seniors with nursing home complaints)

  • 2015-16: 156,112
  • 2014-15: 156,668
  • 2013-14: 155,469
  • 2012-13: 156,476
  • 2011-12: 158,407

Property tax and rent rebates (Includes rebates given to people with disabilities)

  • 2015-16: 548,806 (rebates issued through September 2016)
  • 2014-15: 567,280
  • 2013-14: 580,729
  • 2012-13: 589,135
  • 2011-12: 598,075

VIDEO: Pennsylvania Lottery chief discusses preparations for online gambling

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Penn Live, Lottery Post Staff

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18 comments. Last comment 6 years ago by dpoly1.
Page 1 of 2
TheGameGrl's avatar - Lottery-012.jpg
A long and winding road
United States
Member #17083
June 10, 2005
6643 Posts
Offline

Gov Wolfe has been shuffling these lottery funds for awhile. Since they put such stern regulations on which seniors qualify I have little sympathy for their mismanaging. They created a 3% tax to players so there goes three percent that could have generated a healthy economy. Let Trump fix this since he is so eager to tout his authority. Maybe he'll build hotels for the home bound.

Count your smiles.

    Coin Toss's avatar - shape barbed.jpg
    Zeta Reticuli Star System
    United States
    Member #30469
    January 17, 2006
    11676 Posts
    Offline

    PPPPP

    Pee Poor Proper Prior Planning

    Those who run the lotteries love it when players look for consistency in something that's designed not to have any. So many systems, so many theories, so few jackpot winners. 

    Lep

    There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

      KY Floyd's avatar - sunflowers avatar.jpg
      NY
      United States
      Member #23834
      October 16, 2005
      4579 Posts
      Offline

      "They created a 3% tax to players so there goes three percent that could have generated a healthy economy."

      Right. Because they're going to bury that money in a box instead of spending it.

        zephbe's avatar - animal butterfly.jpg
        South Carolina
        United States
        Member #77165
        July 15, 2009
        896 Posts
        Offline

        PPPPP

        Pee Poor Proper Prior Planning

        PPPPPP

        prior planning prevents p*ss poor performance is the way i heard it put. Smile

        Every champion was once a contender who refused to give up.-Rocky Balboa

        “Don’t let someone who gave up on their dreams talk you out of going after yours.” – Zig Ziglar

          GiveFive's avatar - Lottery-026.jpg
          Florida - West Coast
          United States
          Member #92605
          June 10, 2010
          5728 Posts
          Offline

          I don't care what The State of PA does with their lottery games as long as they don't touch the twice annual Millionaire Raffle. That's the best thing they have going for them, and hopefully they know that. 

          I know how selfish of me that statement is, but as a senior citizen that does not live in PA, I can't and don't benefit from their lottery proceeds. Therefore it does not matter to me what they do with their games with the sole exception of the raffle.  G5

          Play Smart!

            Avatar
            New Member
            Pennsylvania
            United States
            Member #178122
            November 12, 2016
            10 Posts
            Offline

            It's 4 raffles per year. Stealing money from players too. Need better odds & payouts.

              jojosurf's avatar - Lottery-050.jpg
              phila pa
              United States
              Member #25769
              November 11, 2005
              8736 Posts
              Offline

              It's 4 raffles per year. Stealing money from players too. Need better odds & payouts.

              This fund was not to be used they keep coming up with new games and making tons of money especially with there rigged drawings

                luckyshoes's avatar - leaf

                Canada
                Member #79500
                September 2, 2009
                6580 Posts
                Offline

                Gov Wolfe has been shuffling these lottery funds for awhile. Since they put such stern regulations on which seniors qualify I have little sympathy for their mismanaging. They created a 3% tax to players so there goes three percent that could have generated a healthy economy. Let Trump fix this since he is so eager to tout his authority. Maybe he'll build hotels for the home bound.

                I Agree!  Well said.

                  GiveFive's avatar - Lottery-026.jpg
                  Florida - West Coast
                  United States
                  Member #92605
                  June 10, 2010
                  5728 Posts
                  Offline

                  It's 4 raffles per year. Stealing money from players too. Need better odds & payouts.

                  It USED TO BE 4 raffles per year. 

                  The PA Lottery quietly cancelled the Fall raffle (due to lousy results in terms of ticket sales for the Spring 2016 and 4th of July raffles) and went back to have holding just two.  G5

                  Play Smart!

                    Chris$'s avatar - Sphere animated2.gif
                    P A
                    United States
                    Member #117326
                    October 3, 2011
                    8267 Posts
                    Offline

                    The everyday players are the ones who will be screwed.

                    they will find a way to make the odds worse for us and 

                    more profitable for them. It's been slowly happening for years

                    ♠♣♥♦= $$$$


                      United States
                      Member #59352
                      March 13, 2008
                      5626 Posts
                      Offline

                      I read a article about the baby boomer crisis and was taken back on what many on that site were saying.

                      Things like the baby boomers are dead weight, useless, wish they were dead etc...   This is a real crisis

                      but is not limited to just baby boomers.  The birth rate  fell  after the boom but not by that much.  The

                      boomers represent the largest increase but the population explosion continued well past that generation.

                      The problem is the result of two things, mismanagement of funds and the medical industry.  Social Security

                      funds were squandered away by the government.  People are living longer, well if you call that living.  Many

                      can't do anything for themselves but are kept alive for the sake of the medical industry.  The medical industry

                      treats symptoms but does little for the illness.  Until we overhaul the medical system there is not going to 

                      be a cure for the trillions and trillions it will cost to maintain it.   It's a no way out  problem if the medical industry

                      is allowed to continued.  Obama care, the affordable care act, was just that, a act.  The problem is fixable but

                      not using the worse than stupid, dumber than dumb methods we have seen come from our government.  We

                      are approaching the point where we have more hospitals than churches.  It's no wonder the problem is not going

                      away.

                      RL

                      ....

                        Avatar
                        Maryland
                        United States
                        Member #155447
                        May 19, 2014
                        36 Posts
                        Offline

                        Where did the money for the elderly come from before they earmarked the Lottery proceeds? This is one of the reasons I get disgusted when the government creates a new tax or lottery and earmarks the revenue for a certain demographic.  Usually the money that used to come out of the general fund for those projects becomes available for someone's pet project somewhere else.

                        If the Lottery cannot keep up with the demand, then they should just take it from where it used to come from, to make up the shortfall.

                        I don't live in PA by the way, so it doesn't matter to me what they do there.

                          Coin Toss's avatar - shape barbed.jpg
                          Zeta Reticuli Star System
                          United States
                          Member #30469
                          January 17, 2006
                          11676 Posts
                          Offline

                          PPPPPP

                          prior planning prevents p*ss poor performance is the way i heard it put. Smile

                          zephbe,

                          The one I posted was the US Army version, cleaned up a little bit.

                          There's another that goes along with it, If you don't have the time to do it right the first time, where do you think you'll get the time to do it over.

                          Those who run the lotteries love it when players look for consistency in something that's designed not to have any. So many systems, so many theories, so few jackpot winners. 

                          Lep

                          There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

                            Avatar
                            New Member
                            Pennsylvania
                            United States
                            Member #178122
                            November 12, 2016
                            10 Posts
                            Offline

                            Your right, they did cut back this year. Must have not made enough money, lol.

                            I guess my one ticket per raffle wasn't enough (never won jack) I couldn't care

                            less if they squandered all the money. I just want better payouts for the players.

                            its just business for them, reality for us. Seriously 3.07% tax give me a claim winner 

                            first! Maybe the casinos are the better option or just drastically cutting back. Good luck 

                            everyone.