Senior Programs Potentially Impacted

PHILADELPHIA, November 9, 2012 – – State Sen. Vincent Hughes today admonished the Corbett Administration for moving forward with the potential privatization of state lottery management without involvement from the General Assembly or the public.

“There are so many unanswered questions about this plan and how it impacts senior programs,” Hughes (D-Phila./Montgomery) said. “The lottery is a well-run, highly-efficient agency, nationally recognized for its success and has been counted on to fund key senior programs for years. It should not be threatened with privatization.”

Hughes, who serves as the Democratic chair of the Senate Appropriations Committee, called for greater legislative transparency of this process, stating that he was “deeply concerned that this Private Management Agreement (PMA) for the Pennsylvania Lottery is being proposed when the General Assembly is not in session” and legislators have been kept in the dark about the aspects of the proposal.

He also said that the speed with which the governor is considering this change is astounding.

“We were only made aware of the governor’s plans this morning during a telephone conference call involving staff,” Hughes added. “When the governor raised the possibility of considering privatization alternatives we thought there were assurances that no steps would be taken without further input and consultation with the General Assembly.”

Hughes said that it was his understanding that a decision would be made about privatizing the management of the lottery by the end of the year.

“There was no transparency and little chance for lawmakers and the public do a thorough review of this plan to ascertain how privatization impacts seniors and the critical programs that are funded by the lottery,” Hughes said. “The plan to turn over the management of this valuable asset without any real scrutiny by the legislature and without public meetings is a real problem,” Hughes said.

Hughes added that the PMA could have a damaging effect on Pennsylvania’s senior programs and homeowner property tax relief by pitting funding for senior programs against gaming revenues that are used for property tax relief. The governor’s plan includes the introduction of Internet-based lottery products, which will compete with gaming dollars now generated at gaming facilities.

“We have very serious concerns regarding any changes for the management and oversight of such an important agency that has consistently provided to Pennsylvania’s senior citizens,” Hughes said. “Our lottery earmarks all profits for seniors. Every dollar in profit that would now go to a private operator would not go for these essential senior programs.”

The Pennsylvania Lottery generated $3.48 billion in sales last year and slightly more than $1 billion in profit – all of which went to fund key programs for seniors.

Hughes’ added that he is also concerned with the duration of the contract, which may bind programs for seniors into a private, unproven approach for a generation.”

“There are ways to expand Pennsylvania’s Lottery, if needed, without resorting to privatization, including adding games, changing current games and adding kiosks to more locations,” Hughes said. “As evidenced by the robust revenues that the lottery has brought in over the years, the lottery isn’t broken and doesn’t require privateers to fix.”

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