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Pantagraph EditorialTuesday, March 20, 2007 12:14 AM CDT
Don't bet on lottery to bail out stat'e pension debt
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First, Gov. Rod Blagojevich wanted to privatize the lottery to inject more money into education.

Now, he wants to use a lottery sale/lease to bail the state out of its pension debt.

But, in the end, it doesn't really matter who gets the proceeds of Blagojevich's proposed sale or lease of the Illinois Lottery.

The problem isn't where the money would go.

The problem is the proposal itself.

The state would be betting on a questionable sale price and questionable return on investment while giving up control of the lottery and its proceeds.

We don't like the odds.

The governor says the state can get $10 billion by leasing the lottery for up to 75 years.

That figure is apparently based on an estimate by the investment consultant GoldmanSachs which "ran the numbers" last year when Blagojevich first proposed gambling on a lease of the lottery.

But when lawmakers asked to see the details on how that figure was reached last May, the governor's office said there was no "formal" report to share and also said revealing too many details would put the state at a disadvantage when the time came to make the deal.

Lawmakers and taxpapers are certainly at a disadvantage when asked to accept such a deal without knowing the details.

But even if we accept the accuracy of the $10 billion figure, the idea comes with too many questions and potential pitfalls.

How would the state replace the more than $600 million in annual revenue that now goes to the schools?

OK, that was a trick question.

Yes, the lottery money goes to education, but that offsets an equal amount of money from the General Revenue Fund - which means without the lottery, that $600 million would have to come from the already heavily burdened General Revenue Fund.

Meanwhile, specific lottery games have raised more than $2.6 million for the Ticket for the Cure Fund for breast cancer awareness programs and $1.6 million for the Veterans Assistance Fund to support programs for Illinois Military Veterans. That option most likely would be lost with a lottery deal.

If we're lucky, this idea will go nowhere, like the governor's proposal to lease, sell or mortgage the state's Thompson Center in Chicago.

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Reader comments on this story - 4 total

Note: All views and opinions expressed in reader comments are solely those of the individual submitting the comment, and not those of the Pantagraph or its staff.

me again wrote on Mar 20, 2007 11:22 PM:

" Like I care that you went to college. I totally agree that we should starve the beast first but, when you have a bunch of politicians who are as ignorant as the ones we have now, that isn't going to happen. As far as $200 million being a drop in the bucket is concerned, that seems to be the answer for every cynic on the planet. Securing a way to infuse an additional $50 million per year into the pension system, education, or healthcare is allot better than what we have now. If someone is in debt, the first thing they need to stop doing is digging the hole. Then you start cutting back on non essentials for a while, at the same time putting a little of that dirt back in the hole. Before ya know it, the hole is filled in and you still have dirt coming in for a few of those luxuries. But hey, what do I know? I'm just a single parent who does this every day. "

to: me wrote on Mar 20, 2007 12:52 PM:

" I'd rather keep the $10 per week than give it to the state. $10 a week put into a retirement account earning an average of 8% interest compounded monthly comes out to $158,000 at my age 67 retirement. You'd be a fool to say that you wouldn't miss $158,000. I am a college grad, but I don't think for a minute that your idea would solve the budget problem in the state. $200 million over 4 years is a drop in the bucket for the state. They probably loose $50 million a year just in clerical errors. You forget that no amount of money thrown at a problem will solve it if the politicians keep spending. And they won't stop, so why give them more money? Take a page from the play book of Ronald Reagan, and starve the beast first. "

me wrote on Mar 20, 2007 7:24 AM:

" No matter what happens, in the end Blago. will raise income taxes. I personaly do not see a problem with raising the state income tax, for people who earn more than $50,000 per year by 1%. Yes, I earn around $50,000 per year. Raising my state income tax by 1% is not going to put me in the "poor house." In fact, I really wouldn't even miss the increase. People who earn more than $50,000 would have to pay an additional $500 per year in state income taxes. For me that works out to $20.66 more per pay period. $500 extra income tax per year x 100,000 workers = $50,000,000. Over the next 4 years it comes to $200,000,000. We all know there are more than 100,000 people in Illinois who earn at least $50,000 annually. As far the extra $20 per pay period is concerned, most of us burn $20 or more, every time we take our family out for dinner. Just stop going out for dinner 1 time per month, and you have got your $20 bucks back. See there, I'm not even a college grad and I just solved a huge problem in our state budget. "

Leland Lesher wrote on Mar 20, 2007 5:06 AM:

" Pantagraph, you forgot his idea to sell the toll roads in northern Illinois. Heck, why doesn't he sell the Governor's mansion in Springfield to a private museum developer? Nobody lives there. I know, he could sell Springfield and move the State Capital to Chicago................;-) "

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