State lawmakers say they’re skeptical of leasing the Iowa Lottery to a private company for a huge, lump sum payment up front, plus the promise of small share of annual ticket sales. Governor Culver met recently with a business group that hopes to make that deal with the state.
Culver says he’s considering any proposal that will help the state through this economic slump. "Any business that’s going through a tough time — the first thing they look at is assets," Culver says. "So if people are opposed, for example, to leasing the lottery — which I would completely (expect) there will be some opposition to that — are they then in favor deeper across the board cuts?"
Culver says he’s just trying to come up with a variety of budget-balancing options to present to lawmakers. House Democratic Leader Kevin McCarthy of Des Moines won’t rule out the possibility, but he says leasing the lottery would be near the end of his list of options. "The idea of potentially selling a state asset would be something that would be done…only on a few different conditions," McCarthy says. "One, you make a lot of cuts; the economy goes further south and you’re faced with a challenge of cutting into essential services, so I think factors would have to occur before those sort of things would be looked at."
House Republican Leader Paul McKinley of Chariton is also leery of leasing the lottery. "The governor and the Democratic majority find themselves in the situation like the family that bought more house than they can afford," McKinley says. "They’re having to sell some of the furniture now and probably going to a rich relative to see if they can’t get a loan."
The Iowa Lottery began selling tickets on August 22, 1985. According to its website, "the Iowa Lottery has raised more than $1.1 billion dollars for state programs while awarding more than $2.2 billion in prizes to players" in the past23 years.
For the first six years of its existence, the Lottery’s profits were used for state economic development programs, then in 1991 lottery proceeds were dedicated to cultural and environmental programs. State lawmakers faced budget difficulties in 1992 and chose to funnel all lottery profits into the state general fund. It means lottery profits are used for general state spending.