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Illinois House OKs privatizing state lottery

September 10, 2008 at 10:52 PM


SPRINGFIELD (AP)—Illinois would raise $10 billion for building roads and schools by privatizing its state-run lottery for half a century under a plan the House approved Wednesday.

After years of resisting, Speaker Michael Madigan and his House Democrats approved turning the lottery over to a private vendor because Gov. Rod Blagojevich and the Legislature have never agreed on another way to pay for a statewide construction program.

The House also voted to restore some of the painful budget cuts Gov. Rod Blagojevich made this summer, which would stop the closure of dozens of state parks and historic sites and save 325 jobs.

Lawmakers would cover the shortfall by taking “surplus” money from funds set aside for special purposes, but they also restored hundreds of millions of dollars of reductions they admitted they have no way to pay for.

And any budget restorations, as well as the lottery lease, still need approval from an antagonistic Senate, just the latest in a back-and-forth battle between the chambers that has kept lawmakers shuttling to and from Springfield for much of the past two years.

The lottery lease, approved 75-38, was a major step forward for House Democrats, who acknowledged they have warmed to the idea because they can’t get agreement on any other way to fund a long-delayed capital construction program.

But Majority Leader Barbara Flynn Currie pointed out that it could be a year before all the pieces are in place to hire a contractor. And when it comes to how to spend the proceeds, they’re holding out for a project-by-project list driven by their distrust of fellow Democrat Blagojevich.

Blagojevich, who initially proposed a lottery lease last year to pump money into education, turned to it this year as a means of creating hundreds of thousands of construction jobs while not raising general taxes.

Speaking to reporters in Chicago, Blagojevich wasn’t satisfied.

“The lottery is well and good but when are you going to pass the jobs bill?” Blagojevich said. “My fear is this is just another delay tactic in the games that are being played by the House Democratic leadership.”

Republicans complained the legislation is simply Election Day cover for Democrats, who are passing it off as a capital program when it doesn’t authorize any spending and still needs a Senate OK.

Currie, a Chicago Democrat who sponsored the bill, argued such a major step should be in place, and its revenue certain, before money is spent.

“I would love to put a shovel in the ground tomorrow,” Currie said. “There’s no way we would have money to do that under this bill. The worst thing we can say to the people of the state of Illinois is, ‘Here comes your capital program. Break out the shovels.’”

The plan the House approved differs from the one the Senate OK’d earlier this year. Democrats said they are moving more carefully over letting go of the lottery, created in 1974 to help fund public schools, and which lately has earned $650 million annually for education.

No lease that raises less than $10 billion would be approved. It would run at least 50 years but not more than 60. The state would get 20 percent of the vendor’s earnings and promise at least $600 million for schools.

The first $3 billion of the lease would go into a trust fund for education, set aside to generate money from interest and ensure the state can make its annual payment to schools.

The next $7 billion would go to a fund for statewide construction, including rebuilding roads, schools, prisons and other structures that house state services, and creating what the administration says is hundreds of thousands of jobs.

The House approved a plan 97-16 to “sweep” $220 million from special-purpose funds to save the parks and historic sites, set to close this fall, and restore crucial human services jobs.

But the chamber also voted 101-12 to restore another $372 million in spending that was cut by Blagojevich, who said lawmakers sent him an unbalanced budget. House Democrats said the legislation authorized the spending but acknowledged they have no way to back the authorization with dollars.

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I’m confused. I already thought the lottery was going to schools and capital projects. I thought the tobacco lawsuit money was going to health care. We constantly hear that all three of these do not have enough money. How will this be any different?

Posted by .(JavaScript must be enabled to view this email address) on 09/11 at 12:42 PM

The only problem is… they’re taking the money away from dedicated fund… like the Fish & Wildlife Fund and the Habitat Fund.  That’s money we put there to begin with.  Now the habitat committee will have less money to work with in the upcoming year.  They’re just robbing from Peter to pay Paul.

When they do this, they also risk putting the state into reversion and risk having to pay the feds back a lot of money.  Some of these funds (possibly the W&F;fund) get matching money from the feds.  Take away those dedicated funds from their original statutory purpose, and it could cost us more money in the long run.  And it’s all over getting the budget to balance for one year.  We’ll be back in the same boat next year, but with $225 million dollars less in the dedicated funds to steal from!!!

Posted by KC-IBS on 09/11 at 01:45 PM

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