State auditor says he opposes sale of lottery
Posted: Friday, December 26, 2008
JOHNSTON, Iowa (AP) -- Iowa's state auditor said Wednesday he opposes the idea of selling the lottery to help solve the state's budget problems.
Auditor David Vaudt said selling the state lottery would squander a future revenue stream and not deal with the larger issues that have left Iowa with a budget shortfall. He compared the proposal to a decision in 2002 to sell off up to $2 billion in payments from tobacco companies over 25 years for an immediate payment of about $500 million in cash.
"Whenever you are looking at selling assets, we've had piles of money such as the tobacco securitization fund and we've proved that we can't really manage those funds well," said Vaudt.
Vaudt questioned the decision to take immediate money rather than a longterm stream of cash.
"What we ended up doing is wasting those dollars up front and giving up a future revenue stream," said Vaudt. "It is a very short-term, Band-Aid approach for what is a longer term problem like bringing your ongoing revenues in line. I don't like the idea."
Democratic Gov. Chet Culver has said he has spoken with backers of such a sale but has made no decisions about the proposal.
Vaudt, a Republican, offered his opinion during a taping of Iowa Public Television's "Iowa Press" program airing next weekend.
The auditor said selling the lottery doesn't make sense, at least not if the numbers he's heard suggested are true. Those numbers call for a lease of the lottery for up to 50 years in exchange for a lump sum payment of $200 million and some annual lease fee.
The lottery generates more than $50 million a year in profits for the state's budget, and Vaudt predicted the lump sum would quickly evaporate.
Vaudt called for a longer term approach to state spending and said he'd be willing to take a broader view of state services and whether some, such as prisons, should be privatized.
"Everything is on the table," Vaudt said. "It never hurts to take a hard look at how you deliver services. You can't just continue to do the same thing we've been doing."
Vaudt, of West Des Moines, is often mentioned as a potential Republican candidate for governor in 2010, when Gov. Chet Culver will likely seek re-election.
Vaudt said he'll consider running for governor but won't actively explore the idea until after conclusion of the 2009 legislative session.
"People have asked me to at least give it some consideration, so I haven't ruled it out," said Vaudt. "Obviously it's flattering that people would look at me and say we think he can be governor."
As a leading fiscal conservative, Vaudt has been critical of lawmakers of both parties and their handling of state finances. His views on other issues aren't widely known, and for now, he's content to leave it that way.
"Right now I have two good years left in my state auditor role," said Vaudt. "We're at a very crucial time from a financial standpoint. I'm going to be extremely focused on my role as state auditor and considering that would be down the road."
Vaudt and Agriculture Secretary Bill Northey are the only Republicans who hold statewide elective office.
Auditor David Vaudt said selling the state lottery would squander a future revenue stream and not deal with the larger issues that have left Iowa with a budget shortfall. He compared the proposal to a decision in 2002 to sell off up to $2 billion in payments from tobacco companies over 25 years for an immediate payment of about $500 million in cash.
"Whenever you are looking at selling assets, we've had piles of money such as the tobacco securitization fund and we've proved that we can't really manage those funds well," said Vaudt.
Vaudt questioned the decision to take immediate money rather than a longterm stream of cash.
"What we ended up doing is wasting those dollars up front and giving up a future revenue stream," said Vaudt. "It is a very short-term, Band-Aid approach for what is a longer term problem like bringing your ongoing revenues in line. I don't like the idea."
Democratic Gov. Chet Culver has said he has spoken with backers of such a sale but has made no decisions about the proposal.
Vaudt, a Republican, offered his opinion during a taping of Iowa Public Television's "Iowa Press" program airing next weekend.
The auditor said selling the lottery doesn't make sense, at least not if the numbers he's heard suggested are true. Those numbers call for a lease of the lottery for up to 50 years in exchange for a lump sum payment of $200 million and some annual lease fee.
The lottery generates more than $50 million a year in profits for the state's budget, and Vaudt predicted the lump sum would quickly evaporate.
Vaudt called for a longer term approach to state spending and said he'd be willing to take a broader view of state services and whether some, such as prisons, should be privatized.
"Everything is on the table," Vaudt said. "It never hurts to take a hard look at how you deliver services. You can't just continue to do the same thing we've been doing."
Vaudt, of West Des Moines, is often mentioned as a potential Republican candidate for governor in 2010, when Gov. Chet Culver will likely seek re-election.
Vaudt said he'll consider running for governor but won't actively explore the idea until after conclusion of the 2009 legislative session.
"People have asked me to at least give it some consideration, so I haven't ruled it out," said Vaudt. "Obviously it's flattering that people would look at me and say we think he can be governor."
As a leading fiscal conservative, Vaudt has been critical of lawmakers of both parties and their handling of state finances. His views on other issues aren't widely known, and for now, he's content to leave it that way.
"Right now I have two good years left in my state auditor role," said Vaudt. "We're at a very crucial time from a financial standpoint. I'm going to be extremely focused on my role as state auditor and considering that would be down the road."
Vaudt and Agriculture Secretary Bill Northey are the only Republicans who hold statewide elective office.
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