Pennsylvania Lottery

PA Explores Private Lottery Management

The Corbett administration is investigating whether privatizing lottery management will improve its ability to support programs for older Pennsylvanians.  The state’s senior citizen population is projected to grow by 20% over the next decade, and Revenue Secretary Dan Meuser says they want lottery revenues to do the same.

“Keep in mind, the state of Pennsylvania maintains all full control of this lottery,” Meuser tells Radio PA.  “We are not talking about at all selling the lottery.  We are bringing on a private consultant to help us meet the growth demands of the lottery.”

Revenue Secretary Dan Meuser

Revenue Secretary Dan Meuser

There’s no rush.  Requests for Qualifications went out in the spring, and Meuser says they are now in their “due diligence” phase of exploration.  “We’re not there yet,” Meuser explains.  “We’re not sure if a firm out there believes they can in fact do that, or if that firm can be acceptable to us.”

Private firms have expressed interest.  Meuser, however, cannot say which ones or even how many.  He tells us that could affect the competitiveness of the procurement process.  If they decide to proceed, invitations for bid could go out in the fall.

The trail for such private management agreements has already been blazed by the state of Illinois.  The Prairie State has just wrapped up its first fiscal year under private lottery management, and Illinois Lottery Superintendent Michael Jones believes it can work.  “I absolutely believe that the amount of money they promised the state is realizable,” Jones explains.  “With good marketing and good games and good prizes this will be a big success.”

Northstar Lottery Group promised Illinois $851-million dollars in profits during year one, and $951-million dollars in profits in year two.  Under the contract, Jones says, Northstar will receive significant bonuses if they hit those targets, and will have to pay the state penalties if they fall short.  Preliminary revenue numbers for Illinois’ first fiscal year under private lottery management are expected to be released in the near future.

Supporters call it a great way to generate new revenue without raising taxes.  “[Illinois] wouldn’t have done it if they weren’t going to get a billion dollars in extra revenue over the next five years,” says Reason Foundation director of government reform Leonard Gilroy.  “It wouldn’t have happened.”  Like Pennsylvania, Gilroy says states like Indiana and New Jersey are also seriously considering privatizing their lottery management.

Some members of the state House Democratic caucus are already speaking out against the issue in Pennsylvania, however.  “Why would we pay a company millions of dollars to do the same thing we could do ourselves – especially when those millions of dollars are badly needed for programs that help older Pennsylvanians?” asks Minority Leader Frank Dermody (D-Allegheny).

Secretary Meuser says the private entities’ proposals will help them make that call.  It’s something he says they’re taking very seriously. “The lottery funds will continue and only to go to benefit older Pennsylvanians and we are working now to secure that is the case, without question, today and ten years from now.”

RadioPA Roundtable

Radio PA Roundtable 07.20.12

Radio PA Roundtable is a 30-minute program featuring in-depth reporting on the top news stories of the week. Professionally produced and delivered every Friday, Roundtable includes commercial breaks for local sale and quarterly reports for affiliate files.

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Corbett Disappointed in Former PSU Leaders

Governor Tom Corbett took questions from the media for about 20-minutes on Thursday, and almost every one of them was focused on the Jerry Sandusky scandal and its continued fallout at Penn State.  Corbett calls it clear that there was evidence not initially provided by then-PSU officials when it was subpoenaed by the attorney general’s office.

Gov. Corbett answers reporters’ questions on Thursday.

“I am very disappointed in the lack of forthcoming evidence to the subpoena that was given to them by the attorney general’s office,” Corbett says.  “The prior administration, they made decisions as to how they would deliver, and what they would deliver.  I’m sure that is the subject of much discussion on the 16th floor of Strawberry Square.”  As folks in Harrisburg know, the 16th floor of Strawberry Square is where you can find the attorney general.

Corbett did not comment specifically on the prospect of additional charges being filed, telling reporters that his personal opinions are not as important as the conclusions reached by Attorney General Linda Kelly.

The governor was also very careful to direct his criticism at the former leaders of Penn State, not at the university as a whole.  He believes that some media reports are affecting the reputations of many who had nothing to do with the scandal.  “The university is a wonderful, world-class research institution, world-class university as far as I’m concerned,” says Corbett.  “Rather than trying to knock it down as an organization, we ought to be building it up.”

Corbett says he’s read about 2/3 of the ‘Freeh report’ so far, and he plans to talk about it with the Penn State Board of Trustees before he discusses it with the news media.  He believes the entire incident will be judged by people from different perspectives for decades to come.

PA Gaming

Pennsylvania Casinos Wrap Up Profitable Year

It was a good year for table games at Pennsylvania’s casinos, with a double digit increase boosted by June’s numbers and the newest casino.

The Pennsylvania Gaming Control Board says revenue from table games play rose 15.5% last month compared to June of last year, with play up at all but three casinos and helped by the addition of the Valley Forge Casino Resort.

For the fiscal year that ended in June, table games revenue rose nearly 31% over the previous year. All 10 casinos that were operating last year posted increases, with the Sands Casino Resort in Bethlehem showing the highest numbers.

Combined with slot machine revenue generated in the fiscal year, gaming revenue was up 10 percent compared to the previous year.

Dry Weather Impacts Drilling in Parts of the Marcellus Shale Region

The dry weather is having an impact on some drilling operations in the Marcellus Shale region.   It’s affecting water withdrawals in the Susquehanna River Basin.

The number of withdrawal suspensions ebbs and flows with the water flow levels, but operations in 13 Pennsylvania counties have been affected.  Susan Obleski of the Susquehanna River Basin Commission says these water withdrawals have pass by flow restrictions. That means when a certain amount of water is not passing by the withdrawal points, the restrictions kick in.

Obleski says the pass by conditions are based on very conservative assumptions, so they tend to affect withdrawals long before any drought declarations are issued.

Most of the suspensions are related to hydrofracking operations for natural gas drilling but there are also some golf courses affected.   Not all withdrawals have the restrictions,  and those less than 100 thousand gallons a day that are not associated with natural gas development are not regulated by the commission.

California University of Pennsylvania

Lawmaker Blasts State System Tuition Hike

Angry with the State System of Higher Education’s decision to raise tuition rates by 3% this fall, State Rep. Brad Roae (R-Crawford) issued a blunt statement this week, which said it “should be ashamed of itself” for trying to take advantage of students.

Roae tells Radio PA the US Department of Labor recently reported that the Consumer Price Index inflation rate last year was 1.7%.  “But the PASSHE board is calling the 3% tuition increase a below inflation rate increase, which I think is pretty bogus,” Roae explains.  He believes the tuition hike is unnecessary and will only serve to make a college education less affordable.

PASSHE spokesman Kenn Marshall stands by their assertion that tuition has been held under the rate of inflation for the fifth time in the past eight years.  He says the Consumer Price Index and inflation rate are not interchangeable.  “The CPI is actually a number that can be used to calculate the inflation rate… and based on that 1.7% CPI, the annual inflation rate is actually 3.1%.”

Higher Education Rally

Students rallied against proposed higher education budget cuts this spring. In the end, the new state budget included level funding for state-owned and state-related universities.

The mathematical debate notwithstanding, Rep. Roae believes State System tuition should be frozen.  “My ten piece bill package would do what the PASSHE board should be doing, and that’s looking at ways to keep costs down so that tuition isn’t so high.”  In addition to a tuition freeze, Roae’s bills would cap university presidents’ salaries, make full-time professors teach more hours, end paid sabbatical leave and more.

But Marshall says they’ve been actively engaged in costs controls for more than a decade.  “We’ve reduced our costs by almost $230-million dollars over the past ten years,” he says.  That includes 900-positions being left vacant in the past two years alone.

In-state, undergraduate tuition at all 14-state-owned universities will be $6,428 this fall.

Hearing to Focus on Child Advocacy Center Bill

A Child Advocacy Center can be the focal point of care for young victims of physical or sexual abuse.  With them, state Rep. Julie Harhart (R-Lehigh/Northampton) says child victims must only tell their traumatic stories once.  Without them, she says, they would have to go through that experience five or more times for police officers, doctors, social workers and other officials.

Harhart is the prime sponsor of the Children’s Advocacy Center Funding Act which would help to support the state’s 20+ existing CACs, and assist counties that want to establish them.  No taxpayer money would be spent on the program, as HB 1739 calls for a $2-fee on certain court filings in the state.  However, that funding stream may be tweaked in committee to instead come from a fee on certain child abuse background checks conducted by the Department of Public Welfare.

The source of the funding is expected to be thoroughly discussed when the House Judiciary Committee convenes a public hearing in the capitol complex on Tuesday.

Rep. Harhart tells Radio PA that her passion for the bill comes from the success she’s seen firsthand at the Lehigh County Child Advocacy Center.  “It’s a one-stop-shop for the tiniest victims of crime,” she says.

This is not a new issue; Harhart has been working to find a statutory funding stream for CACs for ten years now.  She acknowledges, however, that the Penn State scandal may be bringing her bill more attention this year.