Perry: Selling the State Lottery a Good Deal for Texas
Selling lottery to fund cancer research provides more bang-for-your-buck than bonding
Gov. Rick Perry today told the Texas Public Policy Foundation that his proposal to sell the Texas Lottery for a 40 year private concession is a fiscally sound proposal that will benefit the state. Financial experts conservatively predict the lottery may be sold for $14 billion, generating an estimated $1.3 billion annual interest based on an average return of 9 percent.
"Selling the lottery will work for Texas," Perry said. "The financial gains the sale will generate can effectively provide a long-lasting source of revenue that can ensure we have the money we need to invest in the great challenges we face."
In recent years, the lottery has yielded approximately $1 billion annually. However, this funding is an unstable source of revenue. Selling the lottery for a conservatively estimated $14 billion allows the state to invest in secure trust funds which would annually generate nearly $1.3 billion interest, $300 million more than yearly lottery returns. Gov. Perry proposes using the annual interest gained from the sale of the lottery to establish trust funds in perpetuity for cancer research efforts, public education, and a premium assistance program for the uninsured.
This session, legislators have discussed efforts intended to make Texas a leader in cancer research. With the sale of the lottery, the state can dedicate $300 million annually to finding a cure. Steady funding is particularly important in research endeavors to ensure uninterrupted progression of scientists' work.
The governor also proposes using close to $800 million in earned trust fund interest to fund public education. The governor's budget allocates additional general revenue for public education to ensure there is no gap in education funding.
"Without the sale of the lottery, legislators must fund cancer research from general revenue or through a bond proposal, which will inflate a $3 billion price tag for 20 years to a total of $6 billion due to debt," Perry said. "If legislators are willing to find $300 million in general revenue to finance bonds to fund cancer research, then why not use a smaller amount instead to make education funding whole under the alternative scenario of selling the lottery?"
Additionally, $270 million in annual trust fund earnings is proposed to create a premium assistance program for the uninsured. More than 2 million uninsured Texans are below 200 percent of the federal poverty limit. Perry's proposed "Healthier Texas" program would help individuals purchase health insurance through employer-based programs or private plans.
"This is a unique opportunity for our state to invest in the pillars of prosperity: education, jobs and healthcare," Perry said. "Let's invest in a better Texas through wise use of our resources and a continued commitment to fiscal responsibility."