Published Online: June 6, 2006
Published in Print: June 7, 2006, as Education Windfall?

State Journal

Education Windfall?

Illinois governor proposes lottery sale.

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Gov. Rod R. Blagojevich of Illinois has proposed raising billions of dollars for schools by selling or leasing the state lottery.

The plan, which would need legislative approval, would make Illinois the first state to fully privatize the state lottery.

Mr. Blagojevich, a Democrat who is seeking re-election this fall, hopes to get $10 billion from the sale or lease of the lottery. From that total, he would set aside $4 billion toward a plan to provide $6 billion in new funds to schools over four years. The money would be used for classroom programs, school construction, expanded preschool, full-day kindergarten, merit pay for teachers, and new textbooks, among other purposes.

The remaining $6 billion would be invested to guarantee a $650 million annuity for schools until fiscal 2025.

The $10 billion would be generated either through a competitive bid for a long-term lease of the lottery, an initial public offering in which stock in the state lottery would be sold to investors, or a mix of the two.

“This education plan is historic,” Mr. Blagojevich was quoted as saying May 23 in the Chicago Tribune.

He made the proposal after state Sen. James Meeks, a Democrat, threatened a third-party bid for governor unless the governor promised to increase school aid.

Education watchers had mixed reactions to the proposal.

Bindu Batchu, the campaign manager for A+ Illinois, a Chicago-based organization that lobbies for school finance reform, said the increase in funding will not be sustained after the first four years, under the governor’s plan.

Walter H. Warfield, the president of the Illinois Association of School Administrators, called the plan “a major step in the right direction.” He added, “It’s the first time we’ve gotten a policy-level statement from the governor that talks about school financial need in terms of billions of dollars instead of millions.” But he warned, “New programs are fine after you fully fund mandated programs already on the books.”

PHOTO: A school bus passes an Illinois Lottery billboard in Chicago.
—Charles Rex Arbogast/AP

Vol. 25, Issue 39, Page 24

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