Governor's Lottery Plan A Losing Proposition?

May 21, 2008 12:00:00 AM PDT
Governor Arnold Schwarzenegger's hopes to balance the budget by using the state lottery, may prove to be a losing proposition.Lottery officials now say they expect revenues for the year to be about eight-percent less than predicted. It comes just a week after the governor revised his state spending plan, with a proposal to borrow against future lottery revenues.

No doubt ... with gas and grocery prices high, fewer Californians feel like gambling their hard-earned buck away on the lottery. For former player Kirt Thomas, he's bored with those scratchers and drawings.

Kirt Thomas, Former Lottery Player, says "If I won, maybe I'd start playing some more. I haven't so, it feels like I'm just throwing money away! (laugh)."

Californians like Kirt has forced state lottery officials to lower sales estimates by nearly $300 million dollars. The state would like to lure more players by offering larger prizes, but state law caps payouts at 50% of lottery sales.

Al Lundeen, California State Lottery, says "To increase prize payouts clearly reflects in more playership and that increases sales. It's a basic reform that the lottery would really like to see."

Adjusting rules for bigger prizes is at the core of Governor Schwarzenegger's big plans to double lottery sales and borrow against that to pay down the budget deficit.

The extra money would not go to education. That move is much harder now with sales down and Californians will have to be convinced the gamble is worth it.

St. Sen. Dean Florez, D-Shafter, says "I don't think any voter in California wants the Governor to go out and save our budget deficit with lottery money that should be going to schools."

Until lottery sales grow, this latest downturn means schools will see another $100 million less in the new school year. They typically use lottery money that totals roughly more than a billion dollars a year for one-time expenses like textbooks.

Teri Burns, Public Schools Lobbyist, says "So the effort to put a textbook in every child's hands is made that much harder."

Schools can't really afford to lose any part of their lottery money. The Governor's proposed budget already cuts $4 billion dollars from education.


Plan Not Gaining Support
A new study says most Californians aren't happy about the governor's recent lottery proposal.

In a survey conducted by the Public Policy Institute of California, only 33% said they approved of the governor's plan to borrow money for the budget against future lottery earnings. 58% disapproved.

But when asked about the governor's plan to temporarily raise the state sales tax by one cent, if the lottery plan fails, 54% said they would agree to the tax increase, while 41% said no.


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