BY PATRICK GUINANE, Times of Northwest Indiana
pguinane@nwitimes.com
INDIANAPOLIS | Indiana should seek to reverse an exodus of college graduates by "franchising" the Hoosier Lottery to the highest bidder and pouring the proceeds into merit scholarships and research endowments, Gov. Mitch Daniels said Thursday.
Flanked by supportive university leaders, the Republican governor delivered his plan as a challenge to lawmakers, some of whom quickly found fault with the funding source.
"I have very high hopes that properly understood -- as now I hope it will be -- we're going to have broad bipartisan support for this, and I predict that," Daniels said. "I would say to those who have questions about it: 'What's your plan?'"
Under the governor's proposed scenario, a 30-year lottery lease might bring $1 billion up front for scholarships and research and another $200 million a year to replace lottery revenue that currently flows to teacher pensions and other state programs. The state also would ask the private operator for a 5-percent cut in annual revenues greater than $700 million.
Daniels said the he does not favor "an expansion of gaming," but skeptical lawmakers questioned how he could pull of a such a lucrative deal without giving the private sector more leeway to lure gamblers.
"There going to have to make more money somewhere, and the only way I can image is by expanding gaming," said state Rep. Bob Kuzman, D-Crown Point. "I'm not sure that's a direction we want to take in Indiana."
The Republican governor has received a wealth of criticism lately for championing solutions that he says involve "competitive sourcing" and Democrats call "privatization."
Daniels suggested a key Republican lawmaker who criticized the lottery plan earlier in the week "wasn't paying attention" when staff briefed him on the concept.
"The governor has made a substantial step forward in improving bipartisanship in the Indiana General Assembly because Republicans and Democrats alike say that his plan to privatize the Hoosier Lottery is a very bad idea," quipped House Speaker Pat Bauer, D-South Bend.
While the prospects for legislative approval appear rocky, Daniels said the state soon will seek applications from potential lottery bidders. There already has been some interest in the deal, he added.
University leaders gushed over the idea, calling it "bold," "dramatic" and "remarkable" while taking turns speaking at the Statehouse news conference.
"This investment in our universities would have vast long-term impacts on the economy and quality of life in our state," said Purdue University President Martin Jischke. "We applaud the governor for this visionary proposal.."
Valparaiso Mayor Jon Costas, a member of the Indiana Commission for Higher Education, said the plan represents an investment in Indiana's future.