News

Governor’s lottery plan has merit

I don’t like the California state Lottery. I didn’t vote for it when it was an initiative on the ballot 24 years ago, and I wish it would go away. As a matter of fact, I wrote legislation that required the lottery to warn consumers about the risks involved with playing the game.

The government should not be in the business of gambling and state employees should not make a living off the backs of the poor, who are the majority of lottery players.

But the reality is the state is firmly embedded in the operation of gambling.
The good news is California has the opportunity to get out of the business of operating the lottery, thanks to an idea set forth by Governor Schwarzenegger in the past week. He proposes to lease the lottery to private operators over the next 40 years for a lump sum somewhere between $14 billion and $37 billion, thereby creating a public-private partnership. This could be a worthwhile plan that deserves serious debate.

Let’s face it: Operating the lottery is outside the realm of the government’s mission and competency. Turning the operation over to a private business would not only be a great business move for the state, it also would make for good policy by removing an operational distraction from the state’s core mission of providing public services.

That’s why the transfer of the lottery’s operation to a private firm might have positive results for California.

The private sector is positioned to run tighter, more efficient operations. Under the watch of private business, the lottery would most likely reduce operating expenses and produce higher revenues. Higher profits have the potential to benefit schools, those that play the lottery and the operators.

But already, the governor’s plan has been attacked from both sides.

Some argue that the plan is not true privatization and skirts the bidding process. Public unions fear the loss of lottery jobs. Both of these arguments lack merit and can be addressed through the contract discussions and an open bidding process.

That being said, I have strong objections to the lottery proceeds being used to paper over the current budget gap. That would be a fiscally imprudent decision, and we cannot continue to overspend and rely on windfalls to rescue us from our poor habits.

I am in favor of using the proceeds to pay down the long-term structural deficit but, again, this will only work if we get our spending in check to avoid future financial crisis, like the one that started during the days of Gov. Gray Davis.

The governor’s lottery plan may not be perfect, but to the detractors, I say let’s give it the serious debate and consideration it deserves. And to the governor and Legislative leaders, I say, we have a chance to do something good for California by using these dollars wisely; let’s not blow it by falling back to reckless and wasteful spending habits.


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